UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberMarch 26, 20152016
Commission File Number 0-00981
 
PUBLIX SUPER MARKETS, INC.
(Exact name of Registrant as specified in its charter)
Florida 59-0324412
(State of incorporation) (I.R.S. Employer Identification No.)
  
3300 Publix Corporate Parkway
Lakeland, Florida
 33811
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (863) 688-1188
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.
Yes    X          No          
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.
Yes    X          No          
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer            Accelerated filer           Non-accelerated filer    X    Smaller reporting company           
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes                 No     X  
The number of shares of the Registrant’s common stock outstanding as of OctoberApril 15, 20152016 was 772,086,000.773,551,000.

 




PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts are in thousands, except par value)
September 26, 2015 December 27, 2014March 26, 2016 December 26, 2015
 (Unaudited)  (Unaudited) 
ASSETSASSETS ASSETS 
Current assets:          
Cash and cash equivalents $327,498
 407,493
  $493,677
 352,176
 
Short-term investments 1,113,729
 999,169
  1,402,034
 1,376,698
 
Trade receivables 597,918
 549,443
  724,195
 723,685
 
Merchandise inventories 1,601,841
 1,597,683
  1,623,332
 1,740,513
 
Deferred tax assets 64,715
 71,142
  53,110
 51,216
 
Prepaid expenses 34,693
 108,619
  38,106
 70,145
 
Total current assets 3,740,394
 3,733,549
  4,334,454
 4,314,433
 
Long-term investments 5,710,550
 5,231,561
  5,665,497
 5,226,236
 
Other noncurrent assets 407,802
 395,428
  423,819
 431,311
 
Property, plant and equipment 10,335,199
 9,666,790
  11,006,159
 10,712,312
 
Accumulated depreciation (4,247,886) (3,943,848)  (4,425,873) (4,325,014) 
Net property, plant and equipment 6,087,313
 5,722,942
  6,580,286
 6,387,298
 
 $15,946,059
 15,083,480
  $17,004,056
 16,359,278
 
LIABILITIES AND EQUITYLIABILITIES AND EQUITY LIABILITIES AND EQUITY 
Current liabilities:          
Accounts payable $1,489,523
 1,538,108
  $1,650,496
 1,675,858
 
Accrued expenses:          
Contributions to retirement plans 426,777
 477,154
  271,384
 513,072
 
Self-insurance reserves 147,874
 151,153
  135,871
 135,865
 
Salaries and wages 244,290
 120,372
  180,325
 131,253
 
Other 461,682
 373,086
  410,861
 380,314
 
Current portion of long-term debt 56,554
 24,936
  46,251
 56,693
 
Federal and state income taxes 74,177
 12,982
  229,051
 9,634
 
Total current liabilities 2,900,877
 2,697,791
  2,924,239
 2,902,689
 
Deferred tax liabilities 284,849
 388,667
  436,660
 425,132
 
Self-insurance reserves 215,675
 213,213
  214,314
 214,474
 
Accrued postretirement benefit cost 106,774
 106,570
  101,762
 101,725
 
Long-term debt 176,006
 192,702
  171,398
 179,753
 
Other noncurrent liabilities 112,106
 139,314
  102,323
 104,243
 
Total liabilities 3,796,287
 3,738,257
  3,950,696
 3,928,016
 
Common stock related to Employee Stock Ownership Plan (ESOP) 2,988,709
 2,680,528
  3,425,381
 2,953,878
 
Stockholders’ equity:          
Common stock of $1 par value. Authorized 1,000,000 shares;
issued 783,044 shares in 2015 and 774,472 shares in 2014
 783,044
 774,472
 
Common stock of $1 par value. Authorized 1,000,000 shares;
issued 776,025 shares in 2016 and 770,175 shares in 2015
 776,025
 770,175
 
Additional paid-in capital 2,541,872
 2,200,892
  2,823,792
 2,556,391
 
Retained earnings 9,203,991
 8,218,340
  9,469,429
 9,041,497
 
Treasury stock at cost, 10,563 shares in 2015 (430,934) —
 
Treasury stock at cost, 1,913 shares in 2016 (86,471) —
 
Accumulated other comprehensive earnings 14,642
 109,134
  33,738
 26,268
 
Common stock related to ESOP (2,988,709) (2,680,528)  (3,425,381) (2,953,878) 
Total stockholders’ equity 9,123,906
 8,622,310
  9,591,132
 9,440,453
 
Noncontrolling interests 37,157
 42,385
  36,847
 36,931
 
Total equity 12,149,772
 11,345,223
  13,053,360
 12,431,262
 
 $15,946,059
 15,083,480
  $17,004,056
 16,359,278
 

See accompanying notes to condensed consolidated financial statements.     
1



PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except per share amounts)

 Three Months Ended  Three Months Ended 
September 26, 2015 September 27, 2014March 26, 2016 March 28, 2015
 (Unaudited)  (Unaudited) 
Revenues:          
Sales $7,842,135
 7,379,339
  $8,722,190
 8,349,317
 
Other operating income 60,009
 57,770
  68,371
 63,428
 
Total revenues 7,902,144
 7,437,109
  8,790,561
 8,412,745
 
Costs and expenses:          
Cost of merchandise sold 5,738,223
 5,392,655
  6,271,124
 6,001,231
 
Operating and administrative expenses 1,605,795
 1,526,468
  1,692,650
 1,637,720
 
Total costs and expenses 7,344,018
 6,919,123
  7,963,774
 7,638,951
 
Operating profit 558,126
 517,986
  826,787
 773,794
 
Investment income 35,372
 32,881
  27,830
 35,764
 
Other nonoperating income, net 7,134
 6,027
  11,688
 7,649
 
Earnings before income tax expense 600,632
 556,894
  866,305
 817,207
 
Income tax expense 188,318
 172,676
  284,416
 268,289
 
Net earnings $412,314
 384,218
  $581,889
 548,918
 
Weighted average shares outstanding 774,240
 778,672
  770,776
 775,297
 
Basic and diluted earnings per share $0.53
 0.49
  $0.75
 0.71
 
Dividends paid per common share $0.20
 —
 
Dividends declared per common share $0.20
 0.39
 


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)

 Three Months Ended  Three Months Ended 
September 26, 2015 September 27, 2014March 26, 2016 March 28, 2015
 (Unaudited)  (Unaudited) 
Net earnings $412,314
 384,218
  $581,889
 548,918
 
Other comprehensive earnings:          
Unrealized loss on available-for-sale (AFS) securities net of income taxes of $(36,921) and $(8,205) in 2015 and 2014, respectively (58,631) (13,030) 
Reclassification adjustment for net realized gain on AFS securities net of income taxes of $(5,614) and $(4,998) in 2015 and 2014, respectively (8,914) (7,936) 
Adjustment to postretirement benefit plan obligation net of income taxes of $91 and $54 in 2015 and 2014, respectively 145
 85
 
Unrealized gain (loss) on available-for-sale (AFS) securities net of income taxes of $6,905 and $(2,022) in 2016 and 2015, respectively 10,965
 (3,212) 
Reclassification adjustment for net realized gain on AFS securities net of income taxes of $(2,201) and $(5,941) in 2016 and 2015, respectively (3,495) (9,433) 
Adjustment to postretirement benefit plan obligation net of income taxes of $91 in 2015 —
 145
 
Comprehensive earnings $344,914
 363,337
  $589,359
 536,418
 







See accompanying notes to condensed consolidated financial statements.     
2


PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts are in thousands, except per share amounts)

  Nine Months Ended 
 September 26, 2015 September 27, 2014
  (Unaudited) 
Revenues:       
Sales $24,146,926
   22,699,665
 
Other operating income 185,994
   177,806
 
Total revenues 24,332,920
   22,877,471
 
Costs and expenses:       
Cost of merchandise sold 17,461,792
   16,472,115
 
Operating and administrative expenses 4,870,768
   4,619,397
 
Total costs and expenses 22,332,560
   21,091,512
 
Operating profit 2,000,360
   1,785,959
 
Investment income 116,540
   96,441
 
Other nonoperating income, net 23,715
   18,447
 
Earnings before income tax expense 2,140,615
   1,900,847
 
Income tax expense 696,642
   618,863
 
Net earnings $1,443,973
   1,281,984
 
Weighted average shares outstanding 775,422
   779,595
 
Basic and diluted earnings per share $1.86
   1.64
 
Dividends paid per common share $0.59
   0.37
 


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Amounts are in thousands)

  Nine Months Ended 
 September 26, 2015 September 27, 2014
  (Unaudited) 
Net earnings $1,443,973
   1,281,984
 
Other comprehensive earnings:       
Unrealized (loss) gain on AFS securities net of income taxes of $(39,387) and $23,437 in 2015 and 2014, respectively (62,548)   37,218
 
Reclassification adjustment for net realized gain on AFS securities net of income taxes of $(20,392) and $(13,026) in 2015 and 2014, respectively (32,379)   (20,685) 
Adjustment to postretirement benefit plan obligation net of income taxes of $274 and $160 in 2015 and 2014, respectively 435
   254
 
Comprehensive earnings $1,349,481
   1,298,771
 







See accompanying notes to condensed consolidated financial statements.         
3

PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts are in thousands)

 Nine Months Ended  Three Months Ended 
September 26, 2015 September 27, 2014March 26, 2016 March 28, 2015
 (Unaudited)  (Unaudited) 
Cash flows from operating activities:          
Cash received from customers $24,146,330
 22,732,291
  $8,742,020
 8,320,290
 
Cash paid to employees and suppliers (21,301,936) (19,969,321)  (7,519,371) (7,226,004) 
Income taxes paid (566,823) (713,049)  (10,021) (6,145) 
Self-insured claims paid (227,008) (233,311)  (75,632) (61,937) 
Dividends and interest received 161,545
 166,057
  55,727
 52,067
 
Other operating cash receipts 181,032
 172,335
  66,912
 61,780
 
Other operating cash payments (15,543) (13,594)  (11,218) (4,663) 
Net cash provided by operating activities 2,377,597
 2,141,408
  1,248,417
 1,135,388
 
Cash flows from investing activities:          
Payment for capital expenditures (779,036) (905,166)  (336,682) (221,571) 
Proceeds from sale of property, plant and equipment 3,161
 13,457
  2,589
 640
 
Payment for investments (2,285,154) (1,522,394)  (747,159) (929,244) 
Proceeds from sale and maturity of investments 1,497,765
 1,010,266
  314,608
 249,139
 
Net cash used in investing activities (1,563,264) (1,403,837)  (766,644) (901,036) 
Cash flows from financing activities:          
Payment for acquisition of common stock (682,167) (552,163)  (277,919) (277,730) 
Proceeds from sale of common stock 268,226
 229,931
  110,485
 95,906
 
Dividends paid (458,322) (289,826)  (153,957) —
 
Repayment of long-term debt (25,522) (49,673)  (18,797) (8,698) 
Other, net 3,457
 9,409
  (84) 4,428
 
Net cash used in financing activities (894,328) (652,322)  (340,272) (186,094) 
Net (decrease) increase in cash and cash equivalents (79,995) 85,249
 
Net increase in cash and cash equivalents 141,501
 48,258
 
Cash and cash equivalents at beginning of period 407,493
 301,868
  352,176
 407,493
 
Cash and cash equivalents at end of period $327,498
 387,117
  $493,677
 455,751
 


See accompanying notes to condensed consolidated financial statements.     (Continued)
4

PUBLIX SUPER MARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts are in thousands)
 
 Nine Months Ended  Three Months Ended 
September 26, 2015 September 27, 2014March 26, 2016 March 28, 2015
 (Unaudited)  (Unaudited) 
Reconciliation of net earnings to net cash
provided by operating activities:
          
Net earnings $1,443,973
 1,281,984
  $581,889
 548,918
 
Adjustments to reconcile net earnings to net
cash provided by operating activities:
          
Depreciation and amortization 422,127
 381,194
  149,934
 134,073
 
Increase in LIFO reserve 28,861
 27,940
  7,100
 9,989
 
Retirement contributions paid or payable
in common stock
 282,597
 247,397
  111,193
 107,102
 
Deferred income taxes (37,886) (73,024)  4,930
 (21,258) 
Loss on disposal and impairment of property,
plant and equipment
 43,564
 17,955
  635
 8,312
 
Gain on AFS securities (52,771) (33,711)  (5,696) (15,374) 
Net amortization of investments 102,357
 104,592
  35,566
 33,773
 
Changes in operating assets and liabilities
providing (requiring) cash:
          
Trade receivables (45,969) (1,877)  (548) (44,430) 
Merchandise inventories (33,019) (19,036)  110,081
 (24,650) 
Prepaid expenses and other noncurrent assets (7,645) (7,965)  (6,909) (12,101) 
Accounts payable and accrued expenses 97,064
 260,703
  4,687
 131,079
 
Self-insurance reserves (817) (623)  (154) 1,068
 
Federal and state income taxes 141,171
 (40,747)  257,125
 278,932
 
Other noncurrent liabilities (6,010) (3,374)  (1,416) (45) 
Total adjustments 933,624
 859,424
  666,528
 586,470
 
Net cash provided by operating activities $2,377,597
 2,141,408
  $1,248,417
 1,135,388
 



See accompanying notes to condensed consolidated financial statements.         
5

PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




(1)Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Publix Super Markets, Inc. and subsidiaries (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting. Accordingly, the accompanying statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these statements include all adjustments that are of a normal and recurring nature necessary to present fairly the Company’s financial position and results of operations. Due to the seasonal nature of the Company’s business, the results of operations for the three and nine months ended SeptemberMarch 26, 20152016 are not necessarily indicative of the results for the entire 20152016 fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 27, 201426, 2015.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Certain 2014 amounts have been reclassified to conform with the 2015 presentation in the condensed consolidated statements of cash flows.

(2)Recently Issued Accounting Standards
In January 2014,February 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) permitting companieson lease accounting. The ASU requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to make an accounting policy election to account for qualified affordable housing investments usingbe recognized as assets and liabilities on the proportional amortization method if certain criteria are met. Under this method, the investmentbalance sheet. The ASU is amortized in proportion to the tax credits received and the net investment performance is recognized in the statements of earnings as a component of income tax expense. This ASU was effective for reporting periods beginning after December 15, 20142018 with early adoption permitted. While the Company is still evaluating the ASU, the Company expects the adoption of the ASU to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities on the Consolidated Balance Sheets. The Company does not expect the ASU to have a material effect on the Company’s results of operations, and the ASU will have no effect on cash flows.
In January 2016, the FASB issued an ASU requiring companies to measure equity securities at fair value with changes in fair value recognized in net earnings as opposed to other comprehensive earnings. The ASU is effective for reporting periods beginning after December 15, 2017. The adoption of the ASU will have an effect on the Company’s results of operations. The extent of the effect on results of operations will vary with the changes in the fair value of equity securities. The ASU will not have an effect on the Company’s financial condition or cash flows.
In November 2015, the FASB issued an ASU requiring companies to classify deferred tax assets and liabilities in the noncurrent section of the balance sheet. The ASU is effective for reporting periods beginning after December 15, 2016 with early adoption permitted.  The Company elected to adoptadoption of the ASU early. The cumulativewill not have a material effect of the change from adopting the ASU was recorded during the quarter ended March 29, 2014 as the effect on that quarter and prior periods was not material to the Company’s financial condition orand will not have an effect on the Company’s results of operations.operations or cash flows.
In May 2014, the FASB issued an ASU on the recognition of revenue from contracts with customers. The ASU requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ThisThe ASU is effective for reporting periods beginning after December 15, 2017 andwith early adoption will be permitted only for reporting periods beginning after December 15, 2016. The adoption of thisthe ASU will not have ana material effect on the Company’s financial condition, results of operations or cash flows.

(3)Fair Value of Financial Instruments
The fair value of certain of the Company’s financial instruments, including cash and cash equivalents, trade receivables and accounts payable, approximates their respective carrying amounts due to their short-term maturity.
The fair value of available-for-sale (AFS) securities is based on market prices using the following measurement categories:
Level 1 – Fair value is determined by using quoted prices in active markets for identical investments. AFS securities that are included in this category are primarily a mutual fund,funds, exchange traded funds and equity securities.
Level 2 – Fair value is determined by using other than quoted prices. By using observable inputs (for example, benchmark yields, interest rates, reported trades and broker dealer quotes), the fair value is determined through processes such as benchmark curves, benchmarking of like securities and matrix pricing of corporate, state and municipal bonds by using pricing of similar bonds based on coupons, ratings and maturities. AFS securities that are included in this category are primarily debt securities (tax exempt and taxable bonds).



5

PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Level 3 – Fair value is determined by using other than observable inputs. Fair value is determined by using the best information available in the circumstances and requires significant management judgment or estimation. No AFS securities are currently included in this category.


6

PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Following is a summary of fair value measurements for AFS securities as of SeptemberMarch 26, 20152016 and December 27, 201426, 2015:
  
Fair
Value
 Level 1 Level 2 Level 3
  (Amounts are in thousands)
September 26, 2015 $6,824,279
 1,146,658
 5,677,621
 —
December 27, 2014 6,230,730
 1,439,360
 4,791,370
 —
  
Fair
Value
 Level 1 Level 2 Level 3
  (Amounts are in thousands)
March 26, 2016 $7,067,531
 1,056,036
 6,011,495
 —
December 26, 2015 6,602,934
 1,049,791
 5,553,143
 —

(4)Investments
All of the Company’s debtDebt and equity securities are classified as AFS and are carried at fair value. The Company evaluates whether AFS securities are other-than-temporarily impaired (OTTI) based on criteria that include the extent to which cost exceeds market value, the duration of the market value decline, 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.
Declines in the value of AFS securities determined to be OTTI are recognized in earnings and reported as OTTI losses. Debt securities with unrealized losses are considered OTTI if the Company intends to sell the debt security or if the Company will be required to sell the debt security prior to any anticipated recovery. If the Company determines that a debt security is OTTI under these circumstances, the impairment recognized in earnings is measured as the difference between the amortized cost and the current fair value. A debt security is also determined to be OTTI if the Company does not expect to recover the amortized cost of the debt security. However, in this circumstance, if the Company does not intend to sell the debt security and will not be required to sell the debt security, the impairment recognized in earnings equals the estimated credit loss as measured by the difference between the present value of expected cash flows and the amortized cost of the debt security. Expected cash flows are discounted using the debt security’s effective interest rate. An equity security is determined to be OTTI if the Company does not expect to recover the cost of the equity security. Declines in the value of AFS securities determined to be temporary are reported net of income taxes as other comprehensive losses and included as a component of stockholders’ equity.
Interest and dividend income, amortization of premiums, accretion of discounts and realized gains and losses on AFS securities are included in investment income. Interest income is accrued as earned. Dividend income is recognized as income on the ex-dividend date of the equity security. The cost of AFS securities sold is based on the first-in, first-out method.
Following is a summary of AFS securities as of SeptemberMarch 26, 20152016 and December 27, 201426, 2015:
 
Amortized
Cost
 
Gross
Unrealized
Gains
Gross
Unrealized
Losses
 
Fair
Value
 
Amortized
Cost
 
Gross
Unrealized
Gains
Gross
Unrealized
Losses
 
Fair
Value
 (Amounts are in thousands) (Amounts are in thousands)
September 26, 2015        
March 26, 2016        
Tax exempt bonds $3,437,844
 17,125
 2,425
 3,452,544
 $3,515,795
 17,502
 2,781
 3,530,516
Taxable bonds 2,224,258
 3,405
 3,198
 2,224,465
 2,478,317
 5,761
 3,549
 2,480,529
Restricted investments 164,549
 —
 309
 164,240
 164,549
 —
 309
 164,240
Equity securities 960,064
 63,612
 40,646
 983,030
 845,670
 79,480
 32,904
 892,246
 $6,786,715
 84,142
 46,578
 6,824,279
 $7,004,331
 102,743
 39,543
 7,067,531
December 27, 2014        
December 26, 2015        
Tax exempt bonds $3,205,647
 17,460
 4,011
 3,219,096
 $3,336,841
 12,038
 2,737
 3,346,142
Taxable bonds 1,569,828
 3,005
 4,592
 1,568,241
 2,214,366
 1,492
 10,399
 2,205,459
Restricted investments 170,000
 —
 776
 169,224
 164,548
 —
 1,389
 163,159
Equity securities 1,092,985
 191,493
 10,309
 1,274,169
 836,153
 78,378
 26,357
 888,174
 $6,038,460
 211,958
 19,688
 6,230,730
 $6,551,908
 91,908
 40,882
 6,602,934
Realized gains on sales of AFS securities totaled $29,620,000 and $73,542,000 for the three and nine months ended September 26, 2015, respectively. Realized losses on sales of AFS securities totaled $15,092,000 and $20,771,000 for the three and nine months ended September 26, 2015, respectively.


76

PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





Realized gains on sales of AFS securities totaled $9,251,000 for the three months ended March 26, 2016. Realized losses on sales of AFS securities totaled $3,555,000 for the three months ended March 26, 2016.
Realized gains on sales of AFS securities totaled $13,933,000 and $35,664,000$16,266,000 for the three and nine months ended September 27, 2014, respectively.March 28, 2015. Realized losses on sales of AFS securities totaled $999,000 and $1,953,000$892,000 for the three and nine months ended September 27, 2014March 28, 2015, respectively..
The amortized cost and fair value of AFS securities by expected maturity as of SeptemberMarch 26, 20152016 and December 27, 201426, 2015 are as follows:
 September 26, 2015 December 27, 2014 March 26, 2016 December 26, 2015
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 (Amounts are in thousands) (Amounts are in thousands)
Due in one year or less $1,111,207
 1,113,729
 996,674
 999,169
 $1,400,279
 1,402,034
 1,375,450
 1,376,698
Due after one year through five years 4,277,592
 4,288,374
 3,493,708
 3,501,821
 4,089,875
 4,103,952
 3,951,600
 3,948,654
Due after five years through ten years 202,258
 202,630
 183,552
 183,168
 444,990
 445,322
 161,732
 162,999
Due after ten years 71,045
 72,276
 101,541
 103,179
 58,968
 59,737
 62,425
 63,250
 5,662,102
 5,677,009
 4,775,475
 4,787,337
 5,994,112
 6,011,045
 5,551,207
 5,551,601
Restricted investments 164,549
 164,240
 170,000
 169,224
 164,549
 164,240
 164,548
 163,159
Equity securities 960,064
 983,030
 1,092,985
 1,274,169
 845,670
 892,246
 836,153
 888,174
 $6,786,715
 6,824,279
 6,038,460
 6,230,730
 $7,004,331
 7,067,531
 6,551,908
 6,602,934
Following is a summary of temporarily impaired AFS securities by the time period impaired as of SeptemberMarch 26, 20152016 and December 27, 201426, 2015:
 
Less Than
12 Months
 
12 Months
or Longer
 Total  
Less Than
12 Months
 
12 Months
or Longer
 Total 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 (Amounts are in thousands)  (Amounts are in thousands) 
September 26, 2015             
March 26, 2016             
Tax exempt bonds $401,652
 1,721
 81,065
 704
 482,717
 2,425
  $533,673
 2,736
 11,743
 45
 545,416
 2,781
 
Taxable bonds 1,035,031
 2,834
 78,557
 364
 1,113,588
 3,198
  730,768
 2,950
 176,955
 599
 907,723
 3,549
 
Restricted investments 164,240
 309
 —
 —
 164,240
 309
  164,240
 309
 —
 —
 164,240
 309
 
Equity securities 520,390
 35,420
 15,053
 5,226
 535,443
 40,646
  357,258
 25,288
 21,831
 7,616
 379,089
 32,904
 
Total temporarily impaired AFS securities $2,121,313
 40,284
 174,675
 6,294
 2,295,988
 46,578
 
December 27, 2014             
 $1,785,939
 31,283
 210,529
 8,260
 1,996,468
 39,543
 
December 26, 2015             
Tax exempt bonds $689,909
 2,359
 93,454
 1,652
 783,363
 4,011
  $890,907
 2,264
 63,474
 473
 954,381
 2,737
 
Taxable bonds 936,512
 3,666
 68,035
 926
 1,004,547
 4,592
  1,676,719
 9,988
 70,309
 411
 1,747,028
 10,399
 
Restricted investments 169,224
 776
 —
 —
 169,224
 776
  163,159
 1,389
 —
 —
 163,159
 1,389
 
Equity securities 107,352
 8,373
 6,229
 1,936
 113,581
 10,309
  274,517
 20,561
 16,112
 5,796
 290,629
 26,357
 
Total temporarily impaired AFS securities $1,902,997
 15,174
 167,718
 4,514
 2,070,715
 19,688
 
 $3,005,302
 34,202
 149,895
 6,680
 3,155,197
 40,882
 
There are 343296 AFS securities contributing to the total unrealized loss of $46,578,000$39,543,000 as of SeptemberMarch 26, 20152016. Unrealized losses related to debt securities are primarily due to interest rate volatility impacting the market value of certain bonds. The Company continues to receive scheduled principal and interest payments on these debt securities. Unrealized losses related to equity securities are primarily due to temporary equity market fluctuations that are expected to recover.



87

PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(5)Consolidation of Joint Ventures and Long-Term Debt
From time to time, the Company enters into Joint Ventures (JV), in the legal form of limited liability companies, with certain real estate developers to partner in the development of shopping centers with the Company as the anchor tenant. The Company consolidates certain of these JVs in which it has a controlling financial interest. The Company is considered to have a controlling financial interest in a JV when it has (1) the power to direct the activities of the JV that most significantly impact the JV’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from the JV that could potentially be significant to such JV.
The Company evaluates a JV using specific criteria to determine whether the Company has a controlling financial interest and is the primary beneficiary of the JV. Factors considered in determining whether the Company is the primary beneficiary include risk and reward sharing, experience and financial condition of the other JV members, voting rights, involvement in routine capital and operating decisions and each member’s influence over the JV owned shopping center’s economic performance.
Generally, most major JV decision making is shared between all members. In particular, the use and sale of JV assets, business plans and budgets are generally required to be approved by all members. However, the Company, through its anchor tenant operating lease agreement, has the power to direct the activities that most significantly influence the economic performance of the JV owned shopping center. Additionally, through its member equity interest in the JV, the Company will receive a significant portion of the JV’s benefits or is obligated to absorb a significant portion of the JV’s losses.
As of SeptemberMarch 26, 20152016, the carrying amounts of the assets and liabilities of the consolidated JVs were $145,992,000$141,444,000 and $69,146,000,$65,056,000, respectively. As of December 27, 2014,26, 2015, the carrying amounts of the assets and liabilities of the consolidated JVs were $149,745,000$141,355,000 and $62,867,000,$64,928,000, respectively. The assets are owned by and the liabilities are obligations of the JVs, not the Company, except for a portion of the long-term debt of certain JVs guaranteed by the Company. The JVs are financed with capital contributions from the members, loans and/or the cash flows generated by the JV owned shopping centers once in operation. Total earnings attributable to noncontrolling interests for 20152016 and 20142015 were immaterial. The Company’s involvement with these JVs does not have a significant effect on the Company’s financial condition, results of operations or cash flows.
The Company’s long-term debt results primarily from the consolidation of loans of certain JVs and loans assumed in connection with the acquisition of certain shopping centers with the Company as the anchor tenant. No loans were assumed during the three months ended March 26, 2016. The Company assumed loans totaling $31,759,000 during the ninethree months ended September 26,March 28, 2015. The Company assumed loans totaling $46,377,000 during the nine months ended September 27, 2014. Maturities of JV loans range from June 2016 through August 2017 and have variable interest rates based on a LIBOR index plus 175 to 250 basis points. Maturities of assumed shopping center loans range from JanuaryAugust 2016 through January 2027 and have fixed interest rates ranging from 4.0% to 7.5%.
 
(6)Retirement Plan
The Company has a trusteed, noncontributory Employee Stock Ownership Plan (ESOP) for the benefit of eligible employees. Since the Company’s common stock is not traded on an established securities market, the ESOP includes a put option for shares of the Company’s common stock distributed from the ESOP. Shares are distributed from the ESOP primarily to separated vested participants and certain eligible participants who elect to diversify their account balances. Under the Company’s administration of the ESOP’s put option, if the owners of distributed shares desire to sell their shares, the Company is required to purchase the shares at fair value for a specified time period after distribution of the shares from the ESOP. The fair value of distributed shares subject to the put option totaled $436,200,000$657,270,000 and $243,992,000$427,226,000 as of SeptemberMarch 26, 20152016 and December 27, 2014,26, 2015, respectively. The cost of the shares held by the ESOP totaled $2,552,509,000$2,768,111,000 and $2,436,536,000$2,526,652,000 as of SeptemberMarch 26, 20152016 and December 27, 2014,26, 2015, respectively. Due to the Company’s obligation under the put option, the distributed shares subject to the put option and the shares held by the ESOP are classified as temporary equity in the mezzanine section of the condensed consolidated balance sheets and totaled $2,988,709,000$3,425,381,000 and $2,680,528,000$2,953,878,000 as of SeptemberMarch 26, 20152016 and December 27, 2014,26, 2015, respectively. The fair value of the shares held by the ESOP totaled $9,344,804,000$9,898,691,000 and $7,811,906,000$9,201,171,000 as of SeptemberMarch 26, 2016 and December 26, 2015, and December 27, 2014, respectively.


98

PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(7)Accumulated Other Comprehensive Earnings
A reconciliation of the changes in accumulated other comprehensive earnings net of income taxes for the three months ended SeptemberMarch 26, 20152016 and September 27, 2014March 28, 2015 is as follows:
 
AFS Securities
 
Postretirement Benefits
 
Accumulated Other Comprehensive Earnings
 
AFS Securities
 
Postretirement Benefits
 
Accumulated Other Comprehensive Earnings
 (Amounts are in thousands)  (Amounts are in thousands) 
2016       
Balances at December 26, 2015 $31,295
 (5,027) 26,268
 
Unrealized gain on AFS securities 10,965
 —
 10,965
 
Net realized gain on AFS securities reclassified to investment income (3,495) —
 (3,495) 
Net other comprehensive earnings 7,470
 —
 7,470
 
Balances at March 26, 2016 $38,765
 (5,027) 33,738
 
       
2015          
Balances at June 27, 2015 $90,580
 (8,538) 82,042
 
Balances at December 27, 2014 $117,962
 (8,828) 109,134
 
Unrealized loss on AFS securities (58,631) —
 (58,631)  (3,212) —
 (3,212) 
Net realized gain on AFS securities reclassified to investment income (8,914) —
 (8,914)  (9,433) —
 (9,433) 
Amortization of actuarial losses reclassified to operating and administrative expenses —
 145
 145
 
Amortization of actuarial gain reclassified to operating and administrative expenses —
 145
 145
 
Net other comprehensive (losses) earnings (67,545) 145
 (67,400)  (12,645) 145
 (12,500) 
Balances at September 26, 2015 $23,035
 (8,393) 14,642
 
Balances at March 28, 2015 $105,317
 (8,683) 96,634
 
              
2014   
Balances at June 28, 2014 $132,335
 (7,668) 124,667
 
Unrealized loss on AFS securities (13,030) —
 (13,030) 
Net realized gain on AFS securities reclassified to investment income (7,936) —
 (7,936) 
Amortization of actuarial losses reclassified to operating and administrative expenses —
 85
 85
 
Net other comprehensive (losses) earnings (20,966) 85
 (20,881) 
Balances at September 27, 2014 $111,369
 (7,583) 103,786
 
       
















10

PUBLIX SUPER MARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



A reconciliation of the changes in accumulated other comprehensive earnings net of income taxes for the nine months ended September 26, 2015 and September 27, 2014 is as follows:
  
AFS Securities
 
Postretirement Benefits
 
Accumulated Other Comprehensive Earnings
   (Amounts are in thousands) 
2015            
Balances at December 27, 2014  $117,962
   (8,828)   109,134
 
Unrealized loss on AFS securities  (62,548)   —
   (62,548) 
Net realized gain on AFS securities reclassified to investment income  (32,379)   —
   (32,379) 
Amortization of actuarial losses reclassified to operating and administrative expenses  —
   435
   435
 
Net other comprehensive (losses) earnings  (94,927)   435
   (94,492) 
Balances at September 26, 2015  $23,035
   (8,393)   14,642
 
             
2014    
Balances at December 28, 2013  $94,836
   (7,837)   86,999
 
Unrealized gain on AFS securities  37,218
   —
   37,218
 
Net realized gain on AFS securities reclassified to investment income  (20,685)   —
   (20,685) 
Amortization of actuarial losses reclassified to operating and administrative expenses  —
   254
   254
 
Net other comprehensive earnings  16,533
   254
   16,787
 
Balances at September 27, 2014  $111,369
   (7,583)   103,786
 
             

(8)Subsequent Event
On OctoberApril 1, 2015,2016, the Company declared a quarterly dividend on its common stock of $0.20$0.2225 per share or approximately $154,400,000,$172,100,000, payable NovemberMay 2, 20152016 to stockholders of record as of the close of business OctoberApril 15, 2015.2016.






119


Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
The Company is primarily engaged in the retail food industry, operating supermarkets in Florida, Georgia, Alabama, South Carolina, Tennessee and North Carolina. The Company plans to expand its retail operations into Virginia in 2017. As of SeptemberMarch 26, 2015,2016, the Company operated 1,1031,111 supermarkets. For the ninethree months ended SeptemberMarch 26, 2015, 122016, two supermarkets were opened (including fiveone replacement supermarkets)supermarket) and 12140 supermarkets were remodeled. FourFive supermarkets were closed during the period. Replacement supermarketsThe replacement supermarket that opened during the ninethree months ended SeptemberMarch 26, 20152016 replaced two of the supermarkets closed during the same period andperiod. The three supermarkets closed in 2014 that were replaced on site. The two remaining supermarkets closed during the ninethree months ended SeptemberMarch 26, 20152016 will be replaced on site in subsequent periods. In the normal course of operations, the Company replaces supermarkets and closes supermarkets that are not meeting performance expectations. The impact of future supermarket closings is not expected to be material.
Results of Operations
Sales
Sales for the three months ended SeptemberMarch 26, 20152016 were $7.8$8.7 billion as compared with $7.4$8.3 billion for the three months ended September 27, 2014,March 28, 2015, an increase of $462.8$372.9 million or 6.3%4.5%. The increase in sales for the three months ended SeptemberMarch 26, 20152016 as compared with the three months ended September 27, 2014March 28, 2015 was primarily due to a 4.2%3.3% increase in comparable store sales (supermarkets open for the same weeks in both periods, including replacement supermarkets). Sales for supermarkets that are replaced on site are not considered comparable storeclassified as new supermarket sales since the replacement period for the supermarket is generally 9 to 12 months. Sales for the nine months ended September 26, 2015 were $24.1 billion as compared with $22.7 billion for the nine months ended September 27, 2014, an increase of $1,447.3 million or 6.4%. The increase inCompany estimates that its sales for the ninethree months ended SeptemberMarch 26, 2015 as compared with the nine months ended September 27, 2014 was primarily2016 increased $100 million or 1.2% due to a 4.5% increasethe effect of the Easter holiday being in comparable store sales.the first quarter in 2016. In 2015, the effect of the Easter holiday was in the second quarter. Comparable store sales for the three and nine months ended SeptemberMarch 26, 20152016 increased primarily due to the effect of the early Easter holiday, product cost inflation and increased customer counts resulting from a better economic climate.
Gross profit
Gross profit (sales less cost of merchandise sold) as a percentage of sales was 26.8% and 26.9%28.1% for the three months ended SeptemberMarch 26, 20152016 and September 27, 2014, respectively. Gross profit as a percentage of sales for the three months ended September 26, 2015 as compared with the three months ended September 27, 2014 remained relatively unchanged. Gross profit as a percentage of sales was 27.7% and 27.4% for the nine months ended September 26, 2015 and September 27, 2014, respectively. The increase in gross profit as a percentage of sales for the nine months ended September 26, 2015 as compared with the nine months ended September 27, 2014 was primarily due to changes in promotional activities and pricing strategies.March 28, 2015.
Operating and administrative expenses
Operating and administrative expenses as a percentage of sales were 20.5%19.4% and 20.7%19.6% for the three months ended SeptemberMarch 26, 20152016 and September 27, 2014, respectively. Operating and administrative expenses as a percentage of sales were 20.2% and 20.4% for the nine months ended September 26,March 28, 2015, and September 27, 2014, respectively. The decrease in operating and administrative expenses as a percentage of sales for the three and nine months ended SeptemberMarch 26, 20152016 as compared with the three and nine months ended September 27, 2014March 28, 2015 was primarily due to a decrease in rent as a percentage of sales due to the acquisition of shopping centers with the Company as the anchor tenant.
Investment income
Investment income was $35.4$27.8 million and $32.9$35.8 million for the three months ended SeptemberMarch 26, 20152016 and September 27, 2014, respectively. Investment income was $116.5 million and $96.4 million for the nine months ended September 26,March 28, 2015, and September 27, 2014, respectively. The increasedecrease in investment income for the three and nine months ended SeptemberMarch 26, 20152016 as compared with the three and nine months ended September 27, 2014March 28, 2015 was primarily due to an increasea decrease in net realized gains on AFSthe sale of equity securities.
Income tax expense
The effective income tax rate was 31.4% and 31.0%32.8% for the three months ended SeptemberMarch 26, 20152016 and September 27, 2014, respectively. The increase in the effective income tax rate for the three months ended September 26, 2015 as compared with the three months ended September 27, 2014 was primarily due to a greater percentage increase in earnings than in permanent deductions partially offset by an increase in investment related tax credits. The effective income tax rate was 32.5% and 32.6% for the nine months ended September 26, 2015 and September 27, 2014, respectively. The effective income tax rate for the nine months ended September 26, 2015 as compared with the nine months ended September 27, 2014 remained relatively unchanged.March 28, 2015.


12


Net earnings
Net earnings were $412.3$581.9 million or $0.53$0.75 per share and $384.2$548.9 million or $0.49$0.71 per share for the three months ended SeptemberMarch 26, 20152016 and September 27, 2014,March 28, 2015, respectively. Net earnings as a percentage of sales were 5.3%6.7% and 5.2%6.6% for the three months ended SeptemberMarch 26, 20152016 and September 27, 2014,March 28, 2015, respectively. Net earnings as a percentage of sales for the three months ended SeptemberMarch 26, 20152016 as compared with the three months ended September 27, 2014 remainedMarch 28, 2015 was relatively unchanged. Net earnings were $1,444.0 million or $1.86 per share and $1,282.0 million or $1.64 per share for the nine months ended September 26, 2015 and September 27, 2014, respectively. Net earnings as a percentage of sales were 6.0% and 5.6% for the nine months ended September 26, 2015 and September 27, 2014, respectively. The increase in net earnings as a percentage of sales for the nine months ended September 26, 2015 as compared with the nine months ended September 27, 2014 was primarily due to the increase in gross profit as a percentage of sales and the decrease in operating and administrative expenses as a percentage of sales, as noted above.


10


Liquidity and Capital Resources
Cash and cash equivalents, short-term investments and long-term investments totaled $7,151.8$7,561.2 million as of SeptemberMarch 26, 2015,2016, as compared with $6,638.2$6,955.1 million as of December 27, 2014. This26, 2015 and $7,355.3 million as of March 28, 2015. The increase from the first quarter of 2015 to the first quarter of 2016 was primarily due to netthe Company generating cash provided by operating activities less paymentsin excess of the amount needed for operations, capital expenditures, net acquisitions of common stock repurchases and dividends.dividend payments.
Net cash provided by operating activities
Net cash provided by operating activities was $2,377.6$1,248.4 million and $1,135.4 million for the ninethree months ended SeptemberMarch 26, 2016 and March 28, 2015, as compared with $2,141.4 million for the nine months ended September 27, 2014.respectively. The increase in net cash provided by operating activities for the ninethree months ended SeptemberMarch 26, 20152016 as compared with the ninethree months ended September 27, 2014March 28, 2015 was primarily due to the timing of income tax paymentsincreases in net earnings and non-cash expenses and the increase in net earnings. Any net cash in excesseffect of the amount needed for current operations is invested in short-termtiming differences related to operating assets and long-term investments.liabilities.
Net cash used in investing activities
Net cash used in investing activities was $1,563.3$766.6 million and $901.0 million for the ninethree months ended SeptemberMarch 26, 2016 and March 28, 2015, as compared with $1,403.8 million for the nine months ended September 27, 2014. For the nine months ended September 26, 2015, therespectively. The primary use of net cash in investing activities for the three months ended March 26, 2016 was funding capital expenditures and net increases in investment securities. Capital expenditures totaled $779.0$336.7 million. These expenditures were incurred in connection with the opening of 12two new supermarkets (including fiveone replacement supermarkets)supermarket) and remodeling 12140 supermarkets. Expenditures were also incurred for new supermarkets and remodels in progress, new or enhanced information technology hardware and applications and the acquisition of shopping centers with the Company as the anchor tenant. For the ninethree months ended SeptemberMarch 26, 20152016, the payment for investments, net of the proceeds from the sale and maturity of such investments, was $787.4$432.6 million.
Capital expenditures projection
Capital expenditures for the remainder of 2015 are expected to be approximately $320 million, primarily consisting of new supermarkets, remodeling existing supermarkets, new or enhanced information technology hardware and applications and the acquisition of shopping centers with the Company as the anchor tenant. The shopping center acquisitions are financed with internally generated funds and assumed debt, if prepayment penalties for the debt are determined to be significant. This capital program is subject to continuing change and review.
Net cash used in financing activities
Net cash used in financing activities was $894.3$340.3 million and $186.1 million for the ninethree months ended SeptemberMarch 26, 2016 and March 28, 2015,, as compared with $652.3 million for the nine months ended September 27, 2014. respectively. The increase in net cash used in financing activities for the ninethree months ended SeptemberMarch 26, 20152016 as compared with the ninethree months ended September 27, 2014March 28, 2015 was primarily due to an increase in net common stock repurchases and the change in the frequency of the payment of dividends, as noted below. Net common stock repurchases totaled $413.9$167.4 million and $181.8 million for the ninethree months ended SeptemberMarch 26, 2016 and March 28, 2015, as compared with $322.2 million for the nine months ended September 27, 2014.respectively. The Company currently repurchases common stock at the stockholders’ request in accordance with the terms of the Company’s Employee Stock Purchase Plan (ESPP), Non-Employee Directors Stock Purchase Plan (Directors Plan), 401(k) Plan and ESOP. The amount of common stock offered to the Company for repurchase is not within the control of the Company, but is at the discretion of the stockholders. The Company expects to continue to repurchase its common stock, as offered by its stockholders from time to time, at its then current value for amounts similar to those in prior years. However, with the exception of certain shares distributed from the ESOP, such purchases are not required and the Company retains the right to discontinue them at any time.


13


Dividends
In the third quarter 2015, the Company began paying dividends quarterly rather than semiannually. On August 3, 2015,February 1, 2016, the Company paid its firsta quarterly dividend on its common stock of $0.20 per share or $154.9$154.0 million to stockholders of record as of the close of business JulyJanuary 15, 2016. No dividends were paid during the first quarter of 2015 as the Company began paying dividends quarterly rather than semiannually in the third quarter of 2015.
On JuneApril 1, 2016, the Company declared a quarterly dividend on its common stock of $0.2225 per share or approximately $172.1 million, payable May 2, 2016 to stockholders of record as of the close of business April 15, 2016. On March 6, 2015, the Company paiddeclared a semiannual dividenddivided on its common stock of $0.39 per share or $303.4 million, which was paid on June 1, 2015 to stockholders of record as of the close of business April 30, 2015. On June 2, 2014,
Capital expenditures projection
Capital expenditures for the remainder of 2016 are expected to be approximately $1,160 million, primarily consisting of new supermarkets, remodeling existing supermarkets, remodeling and equipping warehouses, new or enhanced information technology hardware and applications and the acquisition of shopping centers with the Company paid a semiannual dividend on its common stock of $0.37 per share or $289.8 million to stockholders of record as of the close of business April 30, 2014. Due to the change in the frequency of the payment of dividends, the Company paid dividends totaling $0.59 per shareanchor tenant. The shopping center acquisitions are financed with internally generated funds and assumed debt, if prepayment penalties for the nine months ended September 26, 2015 as compared with $0.37 per share for the nine months ended September 27, 2014.
On October 1, 2015, the Company declared a quarterly dividend on its common stock of $0.20 per share or approximately $154.4 million, payable November 2, 2015debt are determined to stockholders of record as of the close of business October 15, 2015.be significant. This capital program is subject to continuing change and review.
Cash requirements
In 2015,2016, the cash requirements for current operations, capital expenditures, net common stock repurchases and dividend payments are expected to be financed by internally generated funds or liquid assets. Based on the Company’s financial position, it is expected that short-term and long-term borrowings would be available to support the Company’s liquidity requirements, if needed.


11


Forward-Looking Statements
From time to time, certain information provided by the Company, including written or oral statements made by its representatives, may contain forward-looking information as defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking information includes statements about the future performance of the Company, which is based on management’s assumptions and beliefs in light of the information currently available to them. When used, the words “plan,” “estimate,” “project,” “intend,” “expect,” “believe” and other similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from those statements including, but not limited to, the following: competitive practices and pricing in the food and drug industries generally and particularly in the Company’s principal markets; results of programs to increase sales, including private label sales; results of programs to control or reduce costs; changes in buying, pricing and promotional practices; changes in shrink management; changes in the general economy; changes in consumer spending; changes in population, employment and job growth in the Company’s principal markets; and other factors affecting the Company’s business within or beyond the Company’s control. These factors include changes in the rate of inflation, changes in federal, state and federal legislation or regulation,local laws and regulations, adverse determinations with respect to litigation or other claims, ability to recruit and retain employees, increases in operating costs including, but not limited to, labor costs, credit card fees and utility costs, particularly electric utility costs,rates, ability to construct new supermarkets or complete remodels as rapidly as planned and stability of product costs. Other factors and assumptions not identified above could also cause the actual results to differ materially from those set forth in the forward-looking statements. TheExcept as may be required by applicable law, the Company assumes no obligation to publicly update these forward-looking statements.
Item 3.        Quantitative and Qualitative Disclosures About Market Risk
The Company does not utilize financial instruments for trading or other speculative purposes, nor does it utilize leveraged financial instruments. There have been no material changes in the market risk factors from those disclosed in the Company’s Form 10-K for the year ended December 27, 201426, 2015.
Item 4.    Controls and Procedures
As of the end of the period covered by this quarterly report,Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer each concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that such information has been accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure. There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation that occurred during the quarter ended SeptemberMarch 26, 20152016 that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.



1412


PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
As reported in the Company’s Form 10-K for the year ended December 27, 201426, 2015, the Company is subject from time to time to various lawsuits, claims and charges arising in the normal course of business. The Company believes its recorded reserves are adequate in light of the probable and estimable liabilities. The estimated amount of reasonably possible losses for lawsuits, claims and charges, individually and in the aggregate, is considered to be immaterial. In the opinion of management, the ultimate resolution of these legal proceedings will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
Item 1A.    Risk Factors
There have been no material changes in the risk factors from those disclosed in the Company’s Form 10-K for the year ended December 27, 201426, 2015.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Shares of common stock repurchased by the Company during the three months ended SeptemberMarch 26, 20152016 were as follows (amounts are in thousands, except per share amounts):
 
Period 
Total Number of Shares Purchased
 
Average Price Paid per Share
 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
 
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
June 28, 2015
through
August 1, 2015
  590
   $42.10
  N/A N/A
August 2, 2015
through
August 29, 2015
  2,309
   42.00
  N/A N/A
August 30, 2015
through
September 26, 2015
  1,866
   42.00
  N/A N/A
 
 
Total
  4,765
   $42.01
  N/A N/A
Period 
Total Number of Shares Purchased
 
Average Price Paid per Share
 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
 
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
December 27, 2015
through
January 30, 2016
  1,538
   $41.80
  N/A N/A
January 31, 2016
through
February 27, 2016
  1,234
   41.80
  N/A N/A
February 28, 2016
through
March 26, 2016
  3,587
   45.18
  N/A N/A
 
 
Total
  6,359
   $43.71
  N/A N/A
(1) 
Common stock is made available for sale by the Company only to the Company’sits current employees and members of the Company’sits Board of Directors through the ESPP and Directors Plan and to participants of the 401(k) Plan. In addition, common stock is provided to employees through the ESOP. The Company currently repurchases common stock subject to certain terms and conditions. The ESPP, Directors Plan, 401(k) Plan and ESOP each contain provisions prohibiting any transfer for value without the owner first offering the common stock to the Company.
The Company’s common stock is not traded on an established securities market. The amount of common stock offered to the Company for repurchase is not within the control of the Company, but is at the discretion of the stockholders. The Company does not believe that these repurchases of its common stock are within the scope of a publicly announced plan or program (although the terms of the plans discussed above have been communicated to the participants). Thus, the Company does not believe that it has made any repurchases during the three months ended SeptemberMarch 26, 20152016 required to be disclosed in the last two columns of the table.

Item 3.    Defaults Upon Senior Securities
Not Applicable
Item 4.    Mine Safety Disclosures
Not Applicable


1513




Item 5.    Other Information
Not Applicable
Item 6.    Exhibits
31.1    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
The following financial information from the Quarterly Report on Form 10-Q for the quarter ended SeptemberMarch 26, 20152016, is formatted in Extensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Earnings, (iii) Condensed Consolidated Statements of Comprehensive Earnings, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements.



1614


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

    
   PUBLIX SUPER MARKETS, INC.
    
    
   
Date:NovemberMay 2, 20152016 /s/  John A. Attaway, Jr.
   John A. Attaway, Jr., Secretary
    
    
   
Date:NovemberMay 2, 20152016 /s/  David P. Phillips
   
David P. Phillips, Executive Vice President and Chief Financial Officer
and Treasurer (Principal Financial and
Accounting Officer)



1715