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 ~~September 25, 2021~~March 26, 2022

Commission File Number: 000-00981

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)

(863) 688-1188

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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 every Interactive Data File required to be submitted 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer Non-accelerated filer X

Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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 ~~October 15, 2021~~April 13, 2022 was ~~686,731,000.~~683,255,000.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PUBLIX SUPER MARKETS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts are in thousands, except par value)

(Unaudited)


		September 25, 2021			December 26, 2020			March 26, 2022			December 25, 2021
ASSETS	ASSETS						ASSETS
Current assets:	Current assets:						Current assets:
Cash and cash equivalents	Cash and cash equivalents		$	1,171,532		673,483	Cash and cash equivalents		$	679,816		1,131,901
Short-term investments	Short-term investments		774,261			682,965	Short-term investments		905,060			883,066
Trade receivables	Trade receivables		797,918			917,531	Trade receivables		842,069			903,570
Inventories	Inventories		1,938,382			2,033,792	Inventories		2,007,275			2,054,394
Prepaid expenses	Prepaid expenses		86,486			110,025	Prepaid expenses		80,777			131,655
Total current assets	Total current assets		4,768,579			4,417,796	Total current assets		4,514,997			5,104,586
Long-term investments	Long-term investments		12,582,694			10,605,234	Long-term investments		12,534,245			12,768,411

Other noncurrent assets	Other noncurrent assets		424,354			415,103	Other noncurrent assets		507,210			445,120
Operating lease right-of-use assets	Operating lease right-of-use assets		2,959,937			2,965,424	Operating lease right-of-use assets		2,897,144			2,950,460
Property, plant and equipment	Property, plant and equipment		17,171,048			16,256,993	Property, plant and equipment		17,662,221			17,305,064
Accumulated depreciation	Accumulated depreciation		(7,032,289)			(6,566,473)	Accumulated depreciation		(7,204,449)			(7,049,294)
Net property, plant and equipment	Net property, plant and equipment		10,138,759			9,690,520	Net property, plant and equipment		10,457,772			10,255,770
			$	30,874,323		28,094,077			$	30,911,368		31,524,347
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY						LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:						Current liabilities:
Accounts payable	Accounts payable		$	2,411,056		2,414,798	Accounts payable		$	2,566,290		2,594,976
Accrued expenses:	Accrued expenses:						Accrued expenses:
Contributions to retirement plans	Contributions to retirement plans		547,114			639,581	Contributions to retirement plans		316,817			661,046
Self-insurance reserves	Self-insurance reserves		186,061			161,223	Self-insurance reserves		197,403			191,477
Salaries and wages	Salaries and wages		380,475			197,721	Salaries and wages		250,761			215,617

Other	Other		771,741			499,970	Other		691,034			764,365
Current portion of long-term debt	Current portion of long-term debt		36,068			36,392	Current portion of long-term debt		43,898			39,168
Current portion of operating lease liabilities	Current portion of operating lease liabilities		354,792			345,805	Current portion of operating lease liabilities		355,025			355,066
Income taxes	Income taxes		—			71,354	Income taxes		251,680			—
Total current liabilities	Total current liabilities		4,687,307			4,366,844	Total current liabilities		4,672,908			4,821,715
Deferred income taxes	Deferred income taxes		1,012,201			772,722	Deferred income taxes		748,763			1,030,677
Self-insurance reserves	Self-insurance reserves		252,017			235,858	Self-insurance reserves		251,905			248,913
Accrued postretirement benefit cost			130,064			131,356
Long-term debt	Long-term debt		112,220			123,835	Long-term debt		82,746			98,185
Operating lease liabilities	Operating lease liabilities		2,572,350			2,588,258	Operating lease liabilities		2,516,022			2,570,421
Finance lease liabilities							Finance lease liabilities		450,874			411,620
Other noncurrent liabilities	Other noncurrent liabilities		535,601			589,340	Other noncurrent liabilities		170,823			304,951
Total liabilities	Total liabilities		9,301,760			8,808,213	Total liabilities		8,894,041			9,486,482
Common stock related to Employee Stock Ownership Plan (ESOP)	Common stock related to Employee Stock Ownership Plan (ESOP)		3,823,072			3,484,549	Common stock related to Employee Stock Ownership Plan (ESOP)		4,426,439			3,825,128
Stockholders’ equity:	Stockholders’ equity:						Stockholders’ equity:
Common stock of $1 par value. Authorized 1,000,000 shares; issued 695,725 shares in 2021 and 690,982 shares in 2020			695,725			690,982
Common stock of $1 par value. Authorized 1,000,000 shares; issued 687,577 shares in 2022 and 683,680 shares in 2021							Common stock of $1 par value. Authorized 1,000,000 shares; issued 687,577 shares in 2022 and 683,680 shares in 2021		687,577			683,680
Additional paid-in capital	Additional paid-in capital		4,291,484			4,005,969	Additional paid-in capital		4,561,214			4,291,484
Retained earnings	Retained earnings		16,972,382			14,343,865	Retained earnings		17,390,611			17,025,406
Treasury stock at cost, 8,405 shares in 2021			(516,367)			—
Accumulated other comprehensive earnings			86,732			200,951
Treasury stock at cost, 4,118 shares in 2022							Treasury stock at cost, 4,118 shares in 2022		(283,338)			—
Accumulated other comprehensive losses							Accumulated other comprehensive losses		(380,552)			(5,421)
Common stock related to ESOP	Common stock related to ESOP		(3,823,072)			(3,484,549)	Common stock related to ESOP		(4,426,439)			(3,825,128)
Total stockholders’ equity	Total stockholders’ equity		17,706,884			15,757,218	Total stockholders’ equity		17,549,073			18,170,021
Noncontrolling interests	Noncontrolling interests		42,607			44,097	Noncontrolling interests		41,815			42,716
Total equity	Total equity		21,572,563			19,285,864	Total equity		22,017,327			22,037,865
			$	30,874,323		28,094,077			$	30,911,368		31,524,347

See accompanying notes to condensed consolidated financial statements.

PUBLIX SUPER MARKETS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts are in thousands, except per share amounts)

(Unaudited)

Three Months Ended
September 25, 2021 September 26, 2020
Revenues:
Sales $ 11,919,567 11,052,138
Other operating income 87,595 84,271
Total revenues 12,007,162 11,136,409
Costs and expenses:
Cost of merchandise sold 8,711,636 8,003,016
Operating and administrative expenses 2,386,006 2,257,070
Total costs and expenses 11,097,642 10,260,086
Operating profit 909,520 876,323
Investment income 130,328 265,295
Other nonoperating income, net 21,968 18,169
Earnings before income tax expense 1,061,816 1,159,787
Income tax expense 204,910 242,203
Net earnings $ 856,906 917,584
Weighted average shares outstanding 688,872 698,843
Earnings per share $ 1.24 1.31


		Three Months Ended
	March 26, 2022			March 27, 2021
Revenues:
Sales		$	13,240,630		11,665,299
Other operating income		94,917			94,936
Total revenues		13,335,547			11,760,235
Costs and expenses:
Cost of merchandise sold		9,566,429			8,383,222
Operating and administrative expenses		2,487,211			2,325,409
Total costs and expenses		12,053,640			10,708,631
Operating profit		1,281,907			1,051,604
Investment (loss) income		(522,976)			841,009


Other nonoperating income, net		25,964			14,637
Earnings before income tax expense		784,895			1,907,250
Income tax expense		166,869			412,157
Net earnings		$	618,026		1,495,093
Weighted average shares outstanding		683,165			691,235
Earnings per share		$	0.90		2.16

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Amounts are in thousands)

(Unaudited)


			Three Months Ended						Three Months Ended
		September 25, 2021			September 26, 2020			March 26, 2022			March 27, 2021
Net earnings	Net earnings		$	856,906		917,584	Net earnings		$	618,026		1,495,093
Other comprehensive earnings:	Other comprehensive earnings:						Other comprehensive earnings:
Unrealized (loss) gain on debt securities net of income taxes of $(4,292) and $1,860 in 2021 and 2020, respectively.			(12,611)			5,456
Reclassification adjustment for net realized gain on debt securities net of income taxes of $(2,133) and $(1,254) in 2021 and 2020, respectively.			(6,258)			(3,678)
Adjustment to postretirement benefit obligation net of income taxes of $470 and $277 in 2021 and 2020, respectively.			1,378			814
Unrealized loss on debt securities net of income taxes of $(127,659) and $(35,287) in 2022 and 2021, respectively.							Unrealized loss on debt securities net of income taxes of $(127,659) and $(35,287) in 2022 and 2021, respectively.		(374,643)			(103,548)
Reclassification adjustment for net realized gain on debt securities net of income taxes of $(282) and $(1,904) in 2022 and 2021, respectively.							Reclassification adjustment for net realized gain on debt securities net of income taxes of $(282) and $(1,904) in 2022 and 2021, respectively.		(826)			(5,583)
Adjustment to postretirement benefit obligation net of income taxes of $115 and $470 in 2022 and 2021, respectively.							Adjustment to postretirement benefit obligation net of income taxes of $115 and $470 in 2022 and 2021, respectively.		338			1,379
Comprehensive earnings	Comprehensive earnings		$	839,415		920,176	Comprehensive earnings		$	242,895		1,387,341

See accompanying notes to condensed consolidated financial statements.

PUBLIX SUPER MARKETS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~EARNINGS~~

~~(Amounts are in thousands, except per share amounts)~~

~~(Unaudited)~~

Nine Months Ended
September 25, 2021 September 26, 2020
Revenues:
Sales $ 35,416,585 33,669,740
Other operating income 277,873 242,183
Total revenues 35,694,458 33,911,923
Costs and expenses:
Cost of merchandise sold 25,610,936 24,196,259
Operating and administrative expenses 7,013,040 6,610,685
Total costs and expenses 32,623,976 30,806,944
Operating profit 3,070,482 3,104,979
Investment income 1,153,309 608,913
Other nonoperating income, net 53,227 31,923
Earnings before income tax expense 4,277,018 3,745,815
Income tax expense 915,615 793,841
Net earnings $ 3,361,403 2,951,974
Weighted average shares outstanding 690,720 702,879
Earnings per share $ 4.87 4.20

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS~~

~~(Amounts are in thousands)~~

~~(Unaudited)~~

Nine Months Ended
September 25, 2021 September 26, 2020
Net earnings $ 3,361,403 2,951,974
Other comprehensive earnings:
Unrealized (loss) gain on debt securities net of income taxes of $(35,156) and $43,620 in 2021 and 2020, respectively. (103,182) 127,951
Reclassification adjustment for net realized gain on debt securities net of income taxes of $(5,149) and $(2,591) in 2021 and 2020, respectively. (15,174) (7,599)
Adjustment to postretirement benefit obligation net of income taxes of $1,410 and $833 in 2021 and 2020, respectively. 4,137 2,443
Comprehensive earnings $ 3,247,184 3,074,769

~~See accompanying notes to condensed consolidated financial statements.~~

~~PUBLIX SUPER MARKETS, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF~~ CASH FLOWS

(Amounts are in thousands)

(Unaudited)


			Nine Months Ended						Three Months Ended
		September 25, 2021			September 26, 2020			March 26, 2022			March 27, 2021
Cash flows from operating activities:	Cash flows from operating activities:						Cash flows from operating activities:
Cash received from customers	Cash received from customers		$	35,626,167		33,730,192	Cash received from customers		$	13,329,586		11,770,839
Cash paid to employees and suppliers	Cash paid to employees and suppliers		(30,926,435)			(28,969,545)	Cash paid to employees and suppliers		(11,800,135)			(10,315,725)
Income taxes paid	Income taxes paid		(668,248)			(613,861)	Income taxes paid		(6,097)			(23,464)
Self-insured claims paid	Self-insured claims paid		(364,315)			(272,717)	Self-insured claims paid		(112,215)			(100,347)
Dividends and interest received	Dividends and interest received		201,996			181,287	Dividends and interest received		73,830			69,002
Other operating cash receipts	Other operating cash receipts		275,448			238,978	Other operating cash receipts		94,173			94,083
Other operating cash payments	Other operating cash payments		(17,892)			(14,414)	Other operating cash payments		(5,889)			(6,091)
Net cash provided by operating activities	Net cash provided by operating activities		4,126,721			4,279,920	Net cash provided by operating activities		1,573,253			1,488,297
Cash flows from investing activities:	Cash flows from investing activities:						Cash flows from investing activities:
Payment for capital expenditures	Payment for capital expenditures		(983,331)			(894,319)	Payment for capital expenditures		(401,982)			(345,933)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment		10,309			3,862	Proceeds from sale of property, plant and equipment		18,126			1,403
Payment for investments	Payment for investments		(2,503,504)			(4,239,533)	Payment for investments		(1,138,916)			(627,866)
Proceeds from sale and maturity of investments	Proceeds from sale and maturity of investments		1,237,953			2,238,071	Proceeds from sale and maturity of investments		202,846			265,360
Net cash used in investing activities	Net cash used in investing activities		(2,238,573)			(2,891,919)	Net cash used in investing activities		(1,319,926)			(707,036)
Cash flows from financing activities:	Cash flows from financing activities:						Cash flows from financing activities:
Payment for acquisition of common stock	Payment for acquisition of common stock		(832,446)			(1,091,145)	Payment for acquisition of common stock		(537,681)			(340,092)
Proceeds from sale of common stock	Proceeds from sale of common stock		197,768			194,894	Proceeds from sale of common stock		100,843			90,882
Dividends paid	Dividends paid		(732,886)			(661,606)	Dividends paid		(252,821)			(220,975)
Repayment of long-term debt	Repayment of long-term debt		(22,548)			(8,600)	Repayment of long-term debt		(14,978)			(3,986)
Other, net	Other, net		13			17,872	Other, net		(775)			(1,514)
Net cash used in financing activities	Net cash used in financing activities		(1,390,099)			(1,548,585)	Net cash used in financing activities		(705,412)			(475,685)
Net increase (decrease) in cash and cash equivalents			498,049			(160,584)
Net (decrease) increase in cash and cash equivalents							Net (decrease) increase in cash and cash equivalents		(452,085)			305,576
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period		673,483			763,382	Cash and cash equivalents at beginning of period		1,131,901			673,483
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period		$	1,171,532		602,798	Cash and cash equivalents at end of period		$	679,816		979,059

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

PUBLIX SUPER MARKETS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts are in thousands)

(Unaudited)


			Nine Months Ended						Three Months Ended
		September 25, 2021			September 26, 2020			March 26, 2022			March 27, 2021
Reconciliation of net earnings to net cash provided by operating activities:	Reconciliation of net earnings to net cash provided by operating activities:						Reconciliation of net earnings to net cash provided by operating activities:
Net earnings	Net earnings		$	3,361,403		2,951,974	Net earnings		$	618,026		1,495,093
Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:						Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization		588,336			545,180	Depreciation and amortization		202,294			192,241
Increase in last-in, first-out (LIFO) reserve	Increase in last-in, first-out (LIFO) reserve		70,138			32,449	Increase in last-in, first-out (LIFO) reserve		32,207			11,291
Retirement contributions paid or payable in common stock	Retirement contributions paid or payable in common stock		321,775			308,387	Retirement contributions paid or payable in common stock		112,796			106,140
Deferred income taxes	Deferred income taxes		278,374			(6,772)	Deferred income taxes		(154,088)			163,276
Loss on disposal and impairment of long-lived assets			57,167			90,686
Gain on investments			(1,009,691)			(460,674)
(Gain) loss on disposal and impairment of long-lived assets							(Gain) loss on disposal and impairment of long-lived assets		(962)			11,485
Loss (gain) on investments							Loss (gain) on investments		579,730			(792,339)
Net amortization of investments	Net amortization of investments		58,055			36,077	Net amortization of investments		21,212			19,373
Changes in operating assets and liabilities providing (requiring) cash:	Changes in operating assets and liabilities providing (requiring) cash:						Changes in operating assets and liabilities providing (requiring) cash:
Trade receivables	Trade receivables		119,626			(40,411)	Trade receivables		61,494			86,223
Inventories	Inventories		25,272			(133,183)	Inventories		14,912			(29,842)
Other assets	Other assets		(2,828)			100,693	Other assets		(1,940)			5,169
Accounts payable and accrued expenses	Accounts payable and accrued expenses		282,482			773,652	Accounts payable and accrued expenses		(221,989)			(5,754)
Income taxes	Income taxes		(42,690)			73,103	Income taxes		310,956			220,740
Other liabilities	Other liabilities		19,302			8,759	Other liabilities		(1,395)			5,201
Total adjustments	Total adjustments		765,318			1,327,946	Total adjustments		955,227			(6,796)
Net cash provided by operating activities	Net cash provided by operating activities		$	4,126,721		4,279,920	Net cash provided by operating activities		$	1,573,253		1,488,297

See accompanying notes to condensed consolidated financial statements.

PUBLIX SUPER MARKETS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts are in thousands, except per share amounts)

(Unaudited)

Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock (Acquired
from) Sold to
Stock-
holders
Accumu-
lated Other Compre-
hensive
Earnings
(Losses)
Common
Stock
Related to
ESOP
Total
Stock-
holders’
Equity
2021
Balances at December 26, 2020 $ 690,982 4,005,969 14,343,865 — 200,951 (3,484,549) 15,757,218
Comprehensive earnings — — 1,495,093 — (107,752) — 1,387,341
Dividends, $0.32 per share — — (220,975) — — — (220,975)
Contribution of 6,786 shares to
retirement plan
4,743 285,438 — 118,388 — — 408,569
Acquisition of 5,731 shares from
stockholders
— — — (340,092) — — (340,092)
Sale of 1,515 shares to stockholders — 5 — 90,877 — — 90,882
Change for ESOP related shares — — — — — (560,684) (560,684)
Balances at March 27, 2021 695,725 4,291,412 15,617,983 (130,827) 93,199 (4,045,233) 16,522,259
Comprehensive earnings — — 1,009,404 — 11,024 — 1,020,428
Dividends, $0.37 per share — — (256,562) — — — (256,562)
Acquisition of 4,059 shares from
stockholders
— — — (248,145) — — (248,145)
Sale of 721 shares to stockholders — 72 — 43,950 — — 44,022
Change for ESOP related shares — — — — — 184,578 184,578
Balances at June 26, 2021 695,725 4,291,484 16,370,825 (335,022) 104,223 (3,860,655) 17,266,580
Comprehensive earnings — — 856,906 — (17,491) — 839,415
Dividends, $0.37 per share — — (255,349) — — — (255,349)
Acquisition of 3,893 shares from
stockholders
— — — (244,209) — — (244,209)
Sale of 999 shares to stockholders — — — 62,864 — — 62,864
Change for ESOP related shares — — — — — 37,583 37,583
Balances at September 25, 2021 $ 695,725 4,291,484 16,972,382 (516,367) 86,732 (3,823,072) 17,706,884


	Common Stock		Additional Paid-in Capital	Retained Earnings	Common Stock (Acquired from) Sold to Stock- holders		Accumu- lated Other Compre- hensive Earnings (Losses)		Common Stock Related to ESOP	Total Stock- holders’ Equity
2022
Balances at December 25, 2021	$	683,680	4,291,484	17,025,406		—		(5,421)	(3,825,128)	18,170,021
Comprehensive earnings	—		—	618,026		—		(375,131)	—	242,895
Dividends, $0.37 per share	—		—	(252,821)		—		—	—	(252,821)
Contribution of 6,208 shares to retirement plan	3,897		269,764	—		153,466		—	—	427,127
Acquisition of 7,901 shares from stockholders	—		—	—		(537,681)		—	—	(537,681)
Sale of 1,472 shares to stockholders	—		(34)	—		100,877		—	—	100,843
Change for ESOP related shares	—		—	—		—		—	(601,311)	(601,311)
Balances at March 26, 2022	$	687,577	4,561,214	17,390,611		(283,338)		(380,552)	(4,426,439)	17,549,073



2021
Balances at December 26, 2020	$	690,982	4,005,969	14,343,865	—	200,951	(3,484,549)	15,757,218
Comprehensive earnings	—		—	1,495,093	—	(107,752)	—	1,387,341
Dividends, $0.32 per share	—		—	(220,975)	—	—	—	(220,975)
Contribution of 6,786 shares to retirement plan	4,743		285,438	—	118,388	—	—	408,569
Acquisition of 5,731 shares from stockholders	—		—	—	(340,092)	—	—	(340,092)
Sale of 1,515 shares to stockholders	—		5	—	90,877	—	—	90,882
Change for ESOP related shares	—		—	—	—	—	(560,684)	(560,684)

Balances at March 27, 2021	$	695,725	4,291,412	15,617,983	(130,827)	93,199	(4,045,233)	16,522,259

See accompanying notes to condensed consolidated financial statements.

~~PUBLIX SUPER MARKETS, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~(Amounts are in thousands, except per share amounts)~~

~~(Unaudited)~~

Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock (Acquired
from) Sold to
Stock-
holders
Accumu-
lated Other Compre-
hensive
Earnings
(Losses)
Common
Stock
Related to
ESOP
Total
Stock-
holders’
Equity
2020
Balances at December 28, 2019 $ 706,552 3,758,066 12,317,478 — 81,289 (3,259,230) 13,604,155
Comprehensive earnings — — 667,335 — (138,494) — 528,841
Dividends, $0.30 per share — — (211,847) — — — (211,847)
Contribution of 7,398 shares to
retirement plan
4,977 242,724 — 114,054 — — 361,755
Acquisition of 9,142 shares from
stockholders
— — — (442,509) — — (442,509)
Sale of 2,239 shares to stockholders 107 5,179 — 104,062 — — 109,348
Change for ESOP related shares — — — — — (444,014) (444,014)
Balances at March 28, 2020 711,636 4,005,969 12,772,966 (224,393) (57,205) (3,703,244) 13,505,729
Comprehensive earnings — — 1,367,055 — 258,697 — 1,625,752
Dividends, $0.32 per share — — (225,495) — — — (225,495)
Acquisition of 6,714 shares from
stockholders
— — — (332,605) — — (332,605)
Sale of 492 shares to stockholders — — — 24,476 — — 24,476
Change for ESOP related shares — — — — — 136,540 136,540
Balances at June 27, 2020 711,636 4,005,969 13,914,526 (532,522) 201,492 (3,566,704) 14,734,397
Comprehensive earnings — — 917,584 — 2,592 — 920,176
Dividends, $0.32 per share — — (224,264) — — — (224,264)
Acquisition of 5,859 shares from
stockholders
— — — (316,031) — — (316,031)
Sale of 1,141 shares to stockholders — — — 61,070 — — 61,070
Change for ESOP related shares — — — — — 52,304 52,304
Balances at September 26, 2020 $ 711,636 4,005,969 14,607,846 (787,483) 204,084 (3,514,400) 15,227,652

~~See accompanying notes to condensed consolidated financial statements.~~

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 (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, ~~and the impact of the coronavirus pandemic,~~ the results of operations for the three ~~and nine~~ months ended ~~September 25, 2021~~March 26, 2022 are not necessarily indicative of the results for the entire ~~2021~~2022 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 ~~26, 2020.~~25, 2021.

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.

(2)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 investments 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. Investments included in this category are equity securities (exchange traded funds).

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 similar securities and matrix pricing of corporate, government-sponsored agency, state and municipal bonds by using pricing of similar bonds based on coupons, ratings and maturities. Investments included in this category are primarily debt securities (tax exempt and taxable bonds), including restricted investments in taxable bonds held as collateral.

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 investments are currently included in this category.

Following is a summary of fair value measurements for investments as of ~~September 25, 2021~~March 26, 2022 and December ~~26, 2020:~~25, 2021:

Fair Value Level 1 Level 2 Level 3
(Amounts are in thousands)
September 25, 2021 $ 13,356,955 2,029,514 11,327,441 —
December 26, 2020 11,288,199 1,465,987 9,822,212 —


	Fair Value		Level 1	Level 2	Level 3
	(Amounts are in thousands)
March 26, 2022	$	13,439,305	2,525,527	10,913,778	—
December 25, 2021	13,651,477		2,159,365	11,492,112	—

PUBLIX SUPER MARKETS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(3)Investments

(a)Debt Securities

Following is a summary of debt securities as of ~~September 25, 2021~~March 26, 2022 and December ~~26, 2020:~~25, 2021:

Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(Amounts are in thousands)
September 25, 2021
Tax exempt bonds $ 341,196 3,348 2 344,542
Taxable bonds 9,275,734 172,580 44,511 9,403,803
Restricted investments 170,708 10,154 106 180,756
$ 9,787,638 186,082 44,619 9,929,101
December 26, 2020
Tax exempt bonds $ 548,438 7,408 88 555,758
Taxable bonds 8,182,003 286,745 8,324 8,460,424
Restricted investments 167,727 14,383 — 182,110
$ 8,898,168 308,536 8,412 9,198,292


	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Amounts are in thousands)
March 26, 2022
Tax exempt bonds	$	229,832		151		142	229,841
Taxable bonds	10,153,631			14,721		510,023	9,658,329
Restricted investments	165,194			2,662		1,367	166,489
	$	10,548,657		17,534		511,532	10,054,659
December 25, 2021
Tax exempt bonds	$	268,899		2,351		—	271,250
Taxable bonds	9,644,692			108,697		108,906	9,644,483
Restricted investments	170,769			7,629		359	178,039
	$	10,084,360		118,677		109,265	10,093,772

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~~March 26, 2022 and December 25, 2021 ~~and December 26, 2020~~ are as follows:


				September 25, 2021			December 26, 2020			March 26, 2022			December 25, 2021
		Cost			Fair Value	Cost		Fair Value		Cost		Fair Value	Cost	Fair Value
		(Amounts are in thousands)								(Amounts are in thousands)
Due in one year or less	Due in one year or less	$	766,268		774,261	677,453		682,965	Due in one year or less	$	902,854	905,060	875,740	883,066
Due after one year through five years	Due after one year through five years	5,976,382			6,114,708	5,330,696		5,533,074	Due after one year through five years	6,986,259		6,707,998	6,353,221	6,403,573
Due after five years through ten years	Due after five years through ten years	3,041,935			3,036,899	2,886,333		2,978,301	Due after five years through ten years	2,656,820		2,438,840	2,852,531	2,804,131
Due after ten years	Due after ten years	3,053			3,233	3,686		3,952	Due after ten years	2,724		2,761	2,868	3,002
		$	9,787,638		9,929,101	8,898,168		9,198,292		$	10,548,657	10,054,659	10,084,360	10,093,772

PUBLIX SUPER MARKETS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company had no debt securities with credit losses as of ~~September 25, 2021~~March 26, 2022 and December ~~26, 2020.~~25, 2021.

Following is a summary of debt securities with other unrealized losses by the time period impaired as of ~~September 25, 2021~~March 26, 2022 and December ~~26, 2020:~~25, 2021:

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 25, 2021
Tax exempt bonds $ 12,390 2 — — 12,390 2
Taxable bonds 3,180,685 34,255 531,692 10,256 3,712,377 44,511
Restricted investments 9,751 106 — — 9,751 106
$ 3,202,826 34,363 531,692 10,256 3,734,518 44,619
December 26, 2020
Tax exempt bonds $ 3,704 88 — — 3,704 88
Taxable bonds 1,157,387 7,946 39,622 378 1,197,009 8,324
$ 1,161,091 8,034 39,622 378 1,200,713 8,412


	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)
March 26, 2022
Tax exempt bonds	$	89,564		142	—		—	89,564		142
Taxable bonds	5,959,756			331,921	1,867,847		178,102	7,827,603		510,023
Restricted investments	7,037			575	8,988		792	16,025		1,367
	$	6,056,357		332,638	1,876,835		178,894	7,933,192		511,532
December 25, 2021

Taxable bonds	$	4,225,323		72,862	1,131,942		36,044	5,357,265		108,906
Restricted investments	17,115			359	—		—	17,115		359
	$	4,242,438		73,221	1,131,942		36,044	5,374,380		109,265

There are ~~159~~370 debt securities contributing to the total unrealized losses of ~~$44,619,000~~$511,532,000 as of ~~September 25, 2021.~~March 26, 2022. 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 ~~$3,427,854,000~~$3,384,646,000 and ~~$2,089,907,000~~$3,557,705,000 as of ~~September~~March 26, 2022 and December 25, 2021, ~~and December 26, 2020,~~ respectively.

(c)Investment Income (Loss)

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 (loss) income for the three ~~and nine~~ months ended ~~September 25, 2021~~March 26, 2022 and ~~September 26, 2020:~~March 27, 2021:


			Three Months Ended					Nine Months Ended					Three Months Ended
		September 25, 2021			September 26, 2020		September 25, 2021		September 26, 2020			March 26, 2022			March 27, 2021
		(Amounts are in thousands)										(Amounts are in thousands)
Interest and dividend income	Interest and dividend income		$	48,992		47,061		143,618		148,239	Interest and dividend income		$	56,754		48,670
Net realized gain on investments	Net realized gain on investments		8,391			109,132		32,376		217,596	Net realized gain on investments		1,108			7,489
			57,383			156,193		175,994		365,835			57,862			56,159
Fair value adjustment, due to net unrealized gain, on equity securities held at end of period			72,945			130,637		986,756		340,618
Net gain on sale of equity securities previously recognized through fair value adjustment			—			(21,535)		(9,441)		(97,540)
Fair value adjustment, due to net unrealized (loss) gain, on equity securities held at end of period											Fair value adjustment, due to net unrealized (loss) gain, on equity securities held at end of period		(580,838)			784,850
			$	130,328		265,295		1,153,309		608,913
													$	(522,976)		841,009

108

PUBLIX SUPER MARKETS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(4)Consolidation of Joint Ventures and Long-Term Debt

From time to time, the Company enters into a joint venture (JV), in the legal form of a limited liability company, with certain real estate developers to partner in the development of a shopping center with the Company as the anchor tenant. The Company consolidates certain of these JVs in which it has a controlling financial interest. As of ~~September~~March 26, 2022, the carrying amounts of the assets and liabilities of the consolidated JVs were $183,056,000 and $75,362,000, respectively. As of December 25, 2021, the carrying amounts of the assets and liabilities of the consolidated JVs were ~~$196,617,000~~$194,493,000 and ~~$78,298,000, respectively. As of December 26, 2020, the carrying amounts of the assets and liabilities of the consolidated JVs were $199,230,000 and $77,565,000,~~$76,027,000, 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 ~~2021~~2022 and ~~2020~~2021 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 ~~nine~~three months ended ~~September 25, 2021~~March 26, 2022 or ~~September 26, 2020.~~March 27, 2021. Maturities of JV loans range from January ~~2022~~2023 through April 2027 and have variable interest rates based on a ~~LIBOR~~London Interbank Offered Rate (LIBOR) index or Secured Overnight Financing Rate (SOFR) index plus ~~200~~205 to 250 basis points. Maturities of assumed shopping center loans range from ~~October 2021~~November 2022 through January 2027 and have fixed interest rates ranging from 3.7% to 7.5%.

(5)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 ~~$563,348,000~~$894,207,000 and ~~$444,801,000~~$608,089,000 as of ~~September~~March 26, 2022 and December 25, 2021, ~~and December 26, 2020,~~ respectively. The cost of the shares held by the ESOP totaled ~~$3,259,724,000~~$3,532,232,000 and ~~$3,039,748,000~~$3,217,039,000 as of ~~September~~March 26, 2022 and December 25, 2021, ~~and December 26, 2020,~~ 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 ~~$3,823,072,000~~$4,426,439,000 and ~~$3,484,549,000~~$3,825,128,000 as of ~~September~~March 26, 2022 and December 25, 2021, ~~and December 26, 2020,~~ respectively. The fair value of the shares held by the ESOP totaled ~~$10,481,250,000~~$11,172,710,000 and ~~$9,976,034,000~~$10,855,152,000 as of ~~September~~March 26, 2022 and December 25, 2021, ~~and December 26, 2020,~~ respectively.

119

PUBLIX SUPER MARKETS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(6)Accumulated Other Comprehensive Earnings (Losses)

A reconciliation of the changes in accumulated other comprehensive earnings (losses) net of income taxes for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021 ~~and September 26, 2020~~ is as follows:

Investments
Postretirement Benefit
Accumulated Other Comprehensive Earnings (Losses)
(Amounts are in thousands)
2021
Balances at June 26, 2021 $ 124,417 (20,194) 104,223
Unrealized loss on debt securities (12,611) — (12,611)
Net realized gain on debt securities reclassified to investment income (6,258) — (6,258)
Adjustment to postretirement benefit obligation — 1,378 1,378
Net other comprehensive (losses) earnings (18,869) 1,378 (17,491)
Balances at September 25, 2021 $ 105,548 (18,816) 86,732
2020
Balances at June 27, 2020 $ 217,080 (15,588) 201,492
Unrealized gain on debt securities 5,456 — 5,456
Net realized gain on debt securities reclassified to investment income (3,678) — (3,678)
Adjustment to postretirement benefit obligation — 814 814
Net other comprehensive earnings 1,778 814 2,592
Balances at September 26, 2020 $ 218,858 (14,774) 204,084

~~PUBLIX SUPER MARKETS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~A reconciliation of the changes in accumulated other comprehensive earnings (losses) net of income taxes for the nine months ended September 25, 2021 and September 26, 2020 is as follows:~~

Investments
Postretirement Benefits
Accumulated Other Comprehensive Earnings (Losses)
(Amounts are in thousands)
2021
Balances at December 26, 2020 $ 223,904 (22,953) 200,951
Unrealized loss on debt securities (103,182) — (103,182)
Net realized gain on debt securities reclassified to investment income (15,174) — (15,174)
Adjustment to postretirement benefit obligation — 4,137 4,137
Net other comprehensive (losses) earnings (118,356) 4,137 (114,219)
Balances at September 25, 2021 $ 105,548 (18,816) 86,732
2020
Balances at December 28, 2019 $ 98,506 (17,217) 81,289
Unrealized gain on debt securities 127,951 — 127,951
Net realized gain on debt securities reclassified to investment income (7,599) — (7,599)
Adjustment to postretirement benefit obligation — 2,443 2,443
Net other comprehensive earnings 120,352 2,443 122,795
Balances at September 26, 2020 $ 218,858 (14,774) 204,084


	Investments			Postretirement Benefit		Accumulated Other Comprehensive Earnings (Losses)
		(Amounts are in thousands)
2022
Balances at December 25, 2021		$	7,054		(12,475)		(5,421)
Unrealized loss on debt securities		(374,643)			—		(374,643)
Net realized gain on debt securities reclassified to investment income		(826)			—		(826)
Adjustment to postretirement benefit obligation		—			338		338
Net other comprehensive (losses) earnings		(375,469)			338		(375,131)
Balances at March 26, 2022		$	(368,415)		(12,137)		(380,552)

2021
Balances at December 26, 2020		$	223,904		(22,953)		200,951
Unrealized loss on debt securities		(103,548)			—		(103,548)
Net realized gain on debt securities reclassified to investment income		(5,583)			—		(5,583)
Adjustment to postretirement benefit obligation		—			1,379		1,379
Net other comprehensive (losses) earnings		(109,131)			1,379		(107,752)
Balances at March 27, 2021		$	114,773		(21,574)		93,199

(7)Subsequent Event

On ~~October~~April 1, ~~2021,~~2022, the Company filed Articles of Amendment to its Restated Articles of Incorporation in order to effect a 5-for-1 stock split of the Company’s common stock, par value $1.00 per share (Common Stock), and an increase in the number of authorized shares of Common Stock from 1,000,000,000 to 4,000,000,000 shares, effective as of the close of business April 14, 2022. In accordance with Section 607.10025 of the Florida Business Corporation Act, the Articles of Amendment were approved by the Company’s Board of Directors on April 1, 2022 without the need for stockholder approval.

On April 1, 2022, the Company declared a post-splitquarterly dividend on its common stock of ~~$0.37~~$0.09 per share or ~~$254,100,000,~~$307,400,000, payable ~~November 1, 2021~~May 2, 2022 to stockholders of record as of the close of business ~~October~~April 15, ~~2021.~~2022. The post-split quarterly dividend of $0.09 per share is equivalent to a pre-split quarterly dividend of $0.45 per share.

1310

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The objective of this section is to provide a summary of material information relevant to enhancing the stockholders’ understanding of the financial condition and results of operations of the Company. Following is an analysis of the financial condition and results of operations of the Company for the three months ended March 26, 2022 as compared with the three months ended March 27, 2021. This information should be read in conjunction with the Company’s condensed consolidated financial statements and accompanying notes and the Company’s Annual Report on Form 10-K for the year ended December 25, 2021.

Overview

The Company is engaged in the retail food industry and as of ~~September 25, 2021~~March 26, 2022 operated ~~1,284~~1,296 supermarkets in Florida, Georgia, Alabama, South Carolina, Tennessee, North Carolina and Virginia. The Company plans to expand its retail operations into Kentucky in 2023. The Company has no other significant lines of business or industry segments. For the ~~nine~~three months ended ~~September 25, 2021, 29~~March 26, 2022, five supermarkets were opened (including ~~six~~two replacement supermarkets) and ~~111~~12 supermarkets were remodeled. ~~Nine~~Two supermarkets were closed during the period. The replacement supermarkets that opened during the ~~nine~~three months ended ~~September 25, 2021~~March 26, 2022 replaced ~~four supermarkets~~one supermarket closed ~~during~~in the same period and ~~two supermarkets~~one supermarket closed ~~during~~in a previous period. ~~Five supermarkets~~One supermarket closed in ~~2021~~2022 will be replaced on site in a subsequent period. 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.

~~Coronavirus Pandemic~~

On March 13, 2020, the coronavirus pandemic was declared a national emergency. The coronavirus pandemic resulted in national, state and local authorities mandating or recommending isolation and other preventative measures for large portions of the population, including mandatory business restrictions and closures. These measures, which were necessary to slow the spread of the virus and protect lives, resulted in significant job losses and had serious adverse impacts on domestic and foreign economies. While economic stabilization efforts, including government payments to affected citizens and industries, have been implemented, the future impact of the coronavirus pandemic continues to be uncertain and difficult to predict. The Company was classified as an essential business and has remained open to serve the needs of its customers throughout the pandemic. It remains a top priority of the Company to continue to serve its customers in a way that protects the health and safety of its employees and customers.

Results of Operations

Sales

Sales for the three months ended ~~September 25, 2021~~March 26, 2022 were ~~$11.9~~$13.2 billion as compared with ~~$11.1~~$11.7 billion for the three months ended ~~September 26, 2020,~~March 27, 2021, an increase of ~~$867.4~~$1,575.3 million or ~~7.8%~~13.5%. The increase in sales for the three months ended ~~September 25, 2021~~March 26, 2022 as compared with the three months ended ~~September 26, 2020~~March 27, 2021 was primarily due to new supermarket sales and ~~a 6.3%~~an 11.7% increase in comparable store sales (supermarkets open for the same weeks in both periods, including replacement supermarkets). Comparable store sales for the three months ended ~~September 25, 2021~~March 26, 2022 increased primarily due to increased product costs. Sales for supermarkets that are replaced on site are classified as new supermarket sales since the replacement period for the supermarket is generally 9 to 12 months.

Sales for the nine months ended September 25, 2021 were $35.4 billion as compared with $33.7 billion for the nine months ended September 26, 2020, an increase of $1,746.8 million or 5.2%. The increase in sales for the nine months ended September 25, 2021 as compared with the nine months ended September 26, 2020 was primarily due to new supermarket sales and a 3.6% increase in comparable store sales. Comparable store sales for the nine months ended September 25, 2021 increased primarily due to increased product costs.

Gross profit

Gross profit (sales less cost of merchandise sold) as a percentage of sales was ~~26.9%~~27.7% and ~~27.6%~~28.1% for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. The decrease in gross profit as a percentage of sales for the three months ended ~~September 25, 2021~~March 26, 2022 as compared with the three months ended ~~September 26, 2020~~March 27, 2021 was primarily due to ~~the increase in the LIFO reserve and~~ product cost increases which were not passed on to ~~customers. Gross profit as a percentage of sales was 27.7%~~customers and 28.1% for the nine months ended September 25, 2021 and September 26, 2020, respectively. The decrease in gross profit as a percentage of sales for the nine months ended September 25, 2021 as compared with the nine months ended September 26, 2020 was primarily due to the increaseincreases in the LIFO reserve and ~~a decrease in the impact of the coronavirus pandemic on shrink and volume driven efficiencies in 2021 as compared with 2020.~~distribution costs.

Operating and administrative expenses

Operating and administrative expenses as a percentage of sales were ~~20.0%~~18.8% and ~~20.4%~~19.9% for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. The decrease in operating and administrative expenses as a percentage of sales for the three months ended ~~September 25, 2021~~March 26, 2022 as compared with the three months ended ~~September 26, 2020~~March 27, 2021 was primarily due to ~~a decrease~~decreases in payroll costs as a percentage of sales ~~partially offset by an increase in~~and facility costs as a percentage of sales. Operating and administrative expenses as a percentage of sales were 19.8% and 19.6% for the nine months ended September 25, 2021 and September 26, 2020, respectively. The increase in operating and administrative expenses as a percentage of sales for the nine months ended September 25, 2021 as compared with the nine months ended September 26, 2020 was primarily due to an increase in payroll costs as a percentage of sales.

Operating profit

Operating profit as a percentage of sales was ~~7.6%~~9.7% and ~~7.9%~~9.0% for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. The ~~decrease~~increase in operating profit as a percentage of sales for the three months ended ~~September 25, 2021~~March 26, 2022 as compared with the three months ended ~~September 26, 2020~~March 27, 2021 was primarily due to the decrease in ~~gross profit~~operating and administrative expenses as a percentage of sales, partially offset by the decrease in operating and administrative expenses as a percentage of sales. Operating profit as a percentage of sales was 8.7% and 9.2% for the nine months ended September 25, 2021 and September 26, 2020, respectively. The decrease in operating profit as a percentage of sales for the nine months ended September 25, 2021 as compared with the nine months ended September 26, 2020 was primarily due to the decrease in gross profit ~~as a percentage of sales and the increase in operating and administrative expenses~~ as a percentage of sales.

Investment income (loss)

Investment ~~income was $130.3 million and $265.3 million~~loss for the three months ended ~~September 25,~~March 26, 2022 was $523.0 million as compared with investment income for the three months ended March 27, 2021 ~~and September 26, 2020, respectively.~~of $841.0 million. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, ~~and 2020,~~ investment income would have been ~~$57.4~~$57.9 million and ~~$156.2~~$56.2 million for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. Excluding the impact of net unrealized gains on equity securities, the decrease in investment income for the three months ended September 25, 2021 as compared with the three months ended September 26, 2020 was primarily due to the decrease in net realized gains on investments.

Investment income was $1,153.3 million and $608.9 million for the nine months ended September 25, 2021 and September 26, 2020, respectively. Excluding the impact of net unrealized gains on equity securities in 2021 and 2020, investment income would have been $176.0 million and $365.8 million for the nine months ended September 25, 2021 and September 26, 2020, respectively. Excluding the impact of net unrealized gains on equity securities, the decrease in investment income for the nine months ended September 25, 2021 as compared with the nine months ended September 26, 2020 was primarily due to the decrease in net realized gains on investments.

Income tax expense

The effective income tax rate was ~~19.3%~~21.3% and ~~20.9%~~21.6% for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. The decrease in the effective income tax rate for the three months ended ~~September 25, 2021~~March 26, 2022 as compared with the three months ended ~~September 26, 2020~~March 27, 2021 was primarily due to the increased impact of permanent deductions and credits relative to earnings before income tax expense, and a reduction in state income tax rates. The effective income tax rate was 21.4% and 21.2% for the nine months ended September 25, 2021 and September 26, 2020, respectively. The increase in the effective income tax rate for the nine months ended September 25, 2021 as compared with the nine months ended September 26, 2020 was primarily due to the decreased impact of permanent deductions and credits relative to earnings before income tax expense, partially offset by ~~a reduction~~an increase in state income tax rates.

Net earnings

Net earnings were ~~$856.9~~$618.0 million or ~~$1.24~~$0.90 per share and ~~$917.6~~$1,495.1 million or ~~$1.31~~$2.16 per share for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. Net earnings as a percentage of sales were ~~7.2%~~4.7% and ~~8.3%~~12.8% for the three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, ~~and 2020,~~ net earnings would have been ~~$802.5~~$1,051.2 million or ~~$1.16~~$1.54 per share and ~~6.7%~~7.9% as a percentage of sales for the three months ended ~~September 25, 2021~~March 26, 2022 and ~~$836.2~~$909.8 million or ~~$1.20~~$1.32 per share and ~~7.6%~~7.8% as a percentage of sales for the three months ended ~~September 26, 2020.~~March 27, 2021. Excluding the impact of net unrealized losses on equity securities in 2022 and net unrealized gains on equity securities in 2021, ~~and 2020,~~ the ~~decrease~~increase in net earnings as a percentage of sales for the three months ended ~~September 25, 2021~~March 26, 2022 as compared with the three months ended ~~September 26, 2020~~March 27, 2021 was primarily due to the ~~decrease~~increase in operating profit as a percentage of ~~sales and net realized gains on investments.~~

Net earnings were $3,361.4 million or $4.87 per share and $2,952.0 million or $4.20 per share for the nine months ended September 25, 2021 and September 26, 2020, respectively. Net earnings as a percentage of sales were 9.5% and 8.8% for the nine months ended September 25, 2021 and September 26, 2020, respectively. Excluding the impact of net unrealized gains on equity securities in 2021 and 2020, net earnings would have been $2,632.6 million or $3.81 per share and 7.4% as a percentage of sales for the nine months ended September 25, 2021 and $2,770.7 million or $3.94 per share and 8.2% as a percentage of sales for the nine months ended September 26, 2020. Excluding the impact of net unrealized gains on equity securities in 2021 and 2020, the decrease in net earnings as a percentage of sales for the nine months ended September 25, 2021 as compared with the nine months ended September 26, 2020 was primarily due to the decrease in operating profit as a percentage of sales and net realized gains on investments.

sales.

Non-GAAP Financial Measures

In addition to reporting financial results for the three ~~and nine~~ months ended ~~September 25,~~March 26, 2022 and March 27, 2021 ~~and September 26, 2020~~ in accordance with GAAP, the Company presents net earnings and earnings per share excluding the impact of equity securities being measured at fair value with net unrealized gains and losses from changes in the fair value recognized in earnings (fair value adjustment). These measures are not in accordance with, or an alternative to, GAAP. The Company excludes the impact of the fair value adjustment since it is primarily due to temporary equity market fluctuations that do not reflect the Company’s operations. The Company believes this information is useful in providing period-to-period comparisons of the results of operations. Following is a reconciliation of net earnings to net earnings excluding the impact of the fair value adjustment for the three ~~and nine~~ months ended ~~September 25, 2021~~March 26, 2022 and ~~September 26, 2020:~~March 27, 2021:


			Three Months Ended					Nine Months Ended					Three Months Ended
		September 25, 2021			September 26, 2020		September 25, 2021		September 26, 2020			March 26, 2022			March 27, 2021
		(Amounts are in millions, except per share amounts)										(Amounts are in millions, except per share amounts)
Net earnings	Net earnings		$	856.9		917.6		3,361.4		2,952.0	Net earnings		$	618.0		1,495.1
Fair value adjustment, due to net unrealized gain, on equity securities held at end of period			(72.9)			(130.6)		(986.7)		(340.6)
Net gain on sale of equity securities previously recognized through fair value adjustment			—			21.5		9.4		97.5
Income tax expense (1)			18.5			27.7		248.5		61.8
Fair value adjustment, due to net unrealized loss (gain), on equity securities held at end of period											Fair value adjustment, due to net unrealized loss (gain), on equity securities held at end of period		580.8			(784.9)

Income tax (benefit) expense (1)											Income tax (benefit) expense (1)		(147.6)			199.6
Net earnings excluding impact of fair value adjustment	Net earnings excluding impact of fair value adjustment		$	802.5		836.2		2,632.6		2,770.7	Net earnings excluding impact of fair value adjustment		$	1,051.2		909.8
Weighted average shares outstanding	Weighted average shares outstanding		688.9			698.8		690.7		702.9	Weighted average shares outstanding		683.2			691.2
Earnings per share excluding impact of fair value adjustment	Earnings per share excluding impact of fair value adjustment		$	1.16		1.20		3.81		3.94	Earnings per share excluding impact of fair value adjustment		$	1.54		1.32

(1)Income tax (benefit) expense is based on the Company’s combined federal and state statutory income tax rates.

1612

Liquidity and Capital Resources

Cash and cash equivalents, short-term investments and long-term investments totaled ~~$14,528.5~~$14,119.1 million as of ~~September 25, 2021,~~March 26, 2022, as compared with ~~$11,961.7~~$14,783.4 million as of December ~~26, 2020~~25, 2021 and ~~$11,419.0~~$13,265.7 million as of ~~September 26, 2020.~~March 27, 2021. The increase from the ~~third~~first quarter of ~~2020~~2021 to the ~~third~~first quarter of ~~2021~~2022 was primarily due to the increase in ~~the fair value of investments and increased sales as a result of the coronavirus pandemic.~~sales.

Net cash provided by operating activities

Net cash provided by operating activities was ~~$4,126.7~~$1,573.3 million and ~~$4,279.9~~$1,488.3 million for the ~~nine~~three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. The ~~decrease~~increase in net cash provided by operating activities for the ~~nine~~three months ended ~~September 25, 2021~~March 26, 2022 as compared with the ~~nine~~three months ended ~~September 26, 2020~~March 27, 2021 was primarily due to the ~~impact of the lag~~increase in ~~payments for merchandise related to increased~~ sales, ~~from the coronavirus pandemic in 2020,~~ partially offset by the ~~decrease~~payment in ~~trade receivables and inventories.~~2022 of payroll taxes that were deferred under various coronavirus tax relief provisions in 2020.

Net cash used in investing activities

Net cash used in investing activities was ~~$2,238.6~~$1,319.9 million and ~~$2,891.9~~$707.0 million for the ~~nine~~three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. The primary use of net cash in investing activities for the ~~nine~~three months ended ~~September 25, 2021~~March 26, 2022 was funding capital expenditures and net increases in investments. Capital expenditures for the ~~nine~~three months ended ~~September 25, 2021~~March 26, 2022 totaled ~~$983.3~~$402.0 million. These expenditures were incurred in connection with the opening of 29five supermarkets (including ~~six~~two replacement supermarkets) and the remodeling of ~~111~~12 supermarkets. Expenditures were also incurred for new supermarkets and remodels in progress, construction or expansion of warehouses and new or enhanced information technology hardware and software. For the ~~nine~~three months ended ~~September 25, 2021,~~March 26, 2022, the payment for investments, net of the proceeds from the sale and maturity of investments, was ~~$1,265.6~~$936.1 million.

Net cash used in financing activities

Net cash used in financing activities was ~~$1,390.1~~$705.4 million and ~~$1,548.6~~$475.7 million for the ~~nine~~three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively. The primary use of net cash in financing activities was funding net common stock repurchases and dividend payments. Net common stock repurchases totaled ~~$634.7~~$436.8 million and ~~$896.3~~$249.2 million for the ~~nine~~three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ 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. 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.

Dividends

The Company paid quarterly dividends on its common stock totaling ~~$732.9~~$252.8 million or ~~$1.06~~$0.37 per share and ~~$661.6~~$221.0 million or ~~$0.94~~$0.32 per share during the ~~nine~~three months ended ~~September 25,~~March 26, 2022 and March 27, 2021, ~~and September 26, 2020,~~ respectively.

Capital expenditures projection

Capital expenditures for the remainder of ~~2021~~2022 are expected to be approximately ~~$400~~$1,600 million, primarily related to new supermarkets, remodeling existing supermarkets, construction or expansion of warehouses, new or enhanced information technology hardware and software and the acquisition or development of shopping centers in which the Company operates. 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.

Cash requirements

In ~~2021,~~2022, cash requirements for operations, capital expenditures, 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.

1713

Forward-Looking Statements

Certain information provided by the Company in this Quarterly Report on Form 10-Q (Quarterly Report) may be forward-looking information as defined in Section 21E of the Securities Exchange Act of 1934 (Exchange Act). Forward-looking information includes statements about the future performance of the Company and is based on management’s assumptions and beliefs in light of the information currently available to ~~them, including as it relates to the coronavirus pandemic.~~them. When used, the words “plan,” “estimate,” “project,” “intend,” “expect,” “believe,” “will” 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, including ~~the~~an economic downturn associated with the coronavirus ~~pandemic;~~pandemic or international conflict; changes in consumer spending; changes in population, employment and job growth in the Company’s principal markets; impacts of a public health crisis, geopolitical conditions or other significant catastrophic event, such as the coronavirus pandemic; impacts of an intrusion into, compromise of or disruption in the Company’s information technology systems; 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 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 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. Except 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 ~~26, 2020.~~25, 2021.

Item 4. Controls and Procedures

As of the end of the period covered by this Quarterly Report, 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 were 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 ~~September 25, 2021~~March 26, 2022 that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.

1814

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As reported in the Company’s Form 10-K for the year ended December ~~26, 2020,~~25, 2021, 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 25, 2021.

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 ~~September 25, 2021~~March 26, 2022 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 27, 2021
through
July 31, 2021
771 $ 61.30 N/A N/A
August 1, 2021
through
August 28, 2021
2,207 63.10 N/A N/A
August 29, 2021
through
September 25, 2021
915 63.10 N/A N/A

Total
3,893 $ 62.74 N/A N/A

Period

Total

Number of

Purchased

Average

Price Paid

per Share

Total

Number of

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 26, 2021

through

January 29, 2022

1,554

66.40

N/A

January 30, 2022

through

February 26, 2022

922

66.40

N/A

February 27, 2022

through

March 26, 2022

5,425

68.80

N/A

Total

7,901

68.05

N/A

(1)Common stock is made available for sale by the Company only to its current employees and members of its 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 ~~September 25, 2021~~March 26, 2022 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

Item 5. Other Information

Not Applicable

1915

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 this Quarterly Report 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, (v) Condensed Consolidated Statements of Stockholders’ Equity and (vi) Notes to Condensed Consolidated Financial Statements.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

2016

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:	~~November 1, 2021~~May 2, 2022	/s/ Merriann M. Metz
		Merriann M. Metz, Secretary



Date:	~~November 1, 2021~~May 2, 2022	/s/ David P. Phillips
		David P. Phillips, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

2117


	Investments			Postretirement Benefits		Accumulated Other Comprehensive Earnings (Losses)
		(Amounts are in thousands)
2021
Balances at December 26, 2020		$	223,904		(22,953)		200,951
Unrealized loss on debt securities		(103,182)			—		(103,182)
Net realized gain on debt securities reclassified to investment income		(15,174)			—		(15,174)
Adjustment to postretirement benefit obligation		—			4,137		4,137
Net other comprehensive (losses) earnings		(118,356)			4,137		(114,219)
Balances at September 25, 2021		$	105,548		(18,816)		86,732

2020
Balances at December 28, 2019		$	98,506		(17,217)		81,289
Unrealized gain on debt securities		127,951			—		127,951
Net realized gain on debt securities reclassified to investment income		(7,599)			—		(7,599)
Adjustment to postretirement benefit obligation		—			2,443		2,443
Net other comprehensive earnings		120,352			2,443		122,795

Balances at September 26, 2020		$	218,858		(14,774)		204,084