Retirement Plans

12 Months Ended

Dec. 25, 2011

Retirement Plans [Abstract]

Retirement Plans

Note 8: Retirement Plans

The Company has a funded, qualified non-contributory defined benefit retirement plan which covers substantially all employees hired before 2007, and non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. The Company also has a retiree medical savings account (established as of the beginning of 2007) which reimburses eligible employees who retire from the Company for certain medical expenses. In addition, the Company has an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992. The previously mentioned plans are collectively referred to as the "Plans." The measurement date for the Plans is the Company's fiscal year end.

In the second quarter of 2009, the Company amended certain of its plans so that future retirement benefits under the retirement, ERISA Excess and Executive Supplemental Retirement plans are based on final average earnings as of May 31, 2009. Service accruals under the retirement and ERISA Excess plans ceased at the beginning of 2007 and the retirement plan was closed to new participants at that time, but benefits had been allowed to grow based on future compensation. In the third quarter of 2009, the Company further amended the Executive Supplemental Retirement Plan so that service provided after January 31, 2010 would not increase a participant's benefit. The two plan amendments in 2009 resulted in a net curtailment gain of $2 million and adjusted Other Comprehensive Income (OCI) by approximately $37 million pretax due to the remeasurement. As a result of these actions, all three plans were effectively frozen. These changes did not affect the benefits of current retirees.

Benefit Obligations

The following table provides a reconciliation of the changes in the Plans' benefit obligations for the years ended December 25, 2011, and December 26, 2010:

	Pension Benefits						Other Benefits
(In thousands)	2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	412,135		$	390,313		$	42,160		$	40,290
Service cost		—			38			226			202
Interest cost		22,426			22,910			1,910			2,319
Participant contributions		—			—			1,450			1,699
Actuarial loss (gain)		41,803			19,416			(2,155	)		1,795
Benefit payments, net of subsidy		(21,460	)		(20,542	)		(3,992	)		(4,145	)
Benefit obligation at end of year	$	454,904		$	412,135		$	39,599		$	42,160

The accumulated benefit obligation at the end of 2011 and 2010 was $455 million and $412 million, respectively. The Company's policy is to fund benefits under the supplemental executive retirement, ERISA Excess, and all postretirement benefits plans as claims and premiums are paid. As of December 25, 2011 and December 26, 2010, the benefit obligation related to the supplemental executive retirement and ERISA Excess plans included in the preceding table was $48.9 million and $44.5 million, respectively. The Plans' benefit obligations were determined using the following assumptions:

	Pension Benefits						Other Benefits
	2011			2010			2011			2010
Discount rate		4.80	%		5.60	%		4.50	%		5.20	%
Compensation increase rate		—			—			3.00			3.50

An 8.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2011 (8.5% for 2010). This rate was assumed to decrease gradually each year to a rate of 5.0% in 2018 and remain at that level thereafter. These rates have an effect on the amounts reported for the Company's postretirement obligations. A one-percentage point increase or decrease in the assumed health care trend rates would change the Company's accumulated postretirement benefit obligation approximately $200 thousand, and the Company's net periodic cost by approximately $2 thousand.

Plan Assets

The following table provides a reconciliation of the changes in the fair value of the Plans' assets for the years ended December 25, 2011 and December 26, 2010:

	Pension Benefits						Other Benefits
(In thousands)	2011			2010			2011			2010
Change in plan assets:
Fair value of plan assets at beginning of year	$	286,208		$	259,063		$	—		$	—
Actual return on plan assets		(4,076	)		25,495			—			—
Employer contributions		12,877			22,192			2,915			3,010
Participant contributions		—			—			1,450			1,699
Benefit payments		(21,460	)		(20,542	)		(4,365	)		(4,709	)
Fair value of plan assets at end of year	$	273,549		$	286,208		$	—		$	—

Under the fair value hierarchy, the Company's retirement plan assets fall under Level 1 (quoted prices in active markets) and Level 2 (other observable inputs). The following table provides the fair value by each major category of plan assets at December 25, 2011 and December 26, 2010:

	2011				2010
	Level 1		Level 2		Level 1		Level 2
U.S. Small/Mid Cap Equity	$	27,919	$	—	$	34,446	$	—
U.S. Large Cap Equity		38,208		63,108		58,991		52,383
International/Global Equity		11,902		39,403		11,778		38,484
Fixed Income		65,507		23,391		64,623		22,882

The asset allocation for the Company's funded retirement plan at the end of 2011 and 2010, and the asset allocation range for 2012, by asset category, are as follows:

	Asset allocation Range	Percentage of Plan Assets at Year End
Asset Category	2012	2011			2010
Equity securities	60% - 75%		66	%		69	%
Fixed income securities/cash	25% - 45%		34	%		31	%
Total			100	%		100	%

As the plan sponsor of the funded retirement plan, the Company's investment strategy is to achieve a rate of return on the plan's assets that, over the long-term, will fund the plan's benefit payments and will provide for other required amounts in a manner that satisfies all fiduciary responsibilities. A determinant of the plan's returns is the asset allocation policy. The Company's investment policy provides absolute ranges (30-50% U.S. large cap equity, 5-17% U.S. small/mid cap equity, 10-30% international/global equity, 25-45% fixed income, and 0-5% cash) for the plan's long-term asset mix. The Company periodically (at least annually) reviews and rebalances the asset mix if necessary. The Company also reviews the plan's overall asset allocation to determine the proper balance of securities by market capitalization, value or growth, U.S., international or global, or the addition of other asset classes.

The plan's investment policy is reviewed frequently and distributed to the investment managers. Periodically, the Company evaluates each investment manager to determine if that manager has performed satisfactorily when compared to the defined objectives, similarly invested portfolios, and specific market indices. The policy contains general guidelines for prohibited transactions such as:

• borrowing of money

• purchase of securities on margin

• short sales

• pledging any securities except loans of securities that are fully-collateralized

• purchase or sale of futures or options for speculation or leverage

Restricted transactions include:

• purchase or sale of commodities, commodity contracts, or illiquid interests in real estate or mortgages

• purchase of illiquid securities such as private placements

• use of various futures and options for hedging or for taking limited risks with a portion of the portfolio's assets

Funded Status

The following table provides a statement of the funded status of the Plans at December 25, 2011 and December 26, 2010:

	Pension Benefits						Other Benefits
(In thousands)	2011			2010			2011			2010
Amounts recorded in the balance sheet:
Current liabilities	$	(2,931	)	$	(2,598	)	$	(3,276	)	$	(3,299	)
Noncurrent liabilities		(178,424	)		(123,329	)		(36,323	)		(38,861	)
Net amount recognized	$	(181,355	)	$	(125,927	)	$	(39,599	)	$	(42,160	)

The following table provides a reconciliation of the Company's accumulated other comprehensive loss related to pension and other benefits prior to any deferred tax effects:

	Pension Benefits		Other Benefits
(In thousands)	Net Actuarial Loss		Net Actuarial Gain			Prior Service (Credit) Cost			Total
December 26, 2010	$	162,645	$	(9,774	)	$	10,106		$	332
Current year change		66,082		(1,128	)		(1,721	)		(2,849	)
December 25, 2011	$	228,727	$	(10,902	)	$	8,385		$	(2,517	)

The Company anticipates recognizing $4.8 million of actuarial loss and $1.3 million of prior service cost, both of which are currently in accumulated other comprehensive loss, as a component of its net periodic cost in 2012. The Company currently anticipates making contributions of $13 million to its retirement plan in 2012, which is based on current estimates of ERISA minimums. This contribution amount was assumed for purposes of these disclosures.

Expected Cash Flows

The following table includes amounts that are expected to be contributed to the Plans by the Company and amounts the Company expects to receive in Medicare subsidy payments. It additionally reflects benefit payments that are made from the Plans' assets as well as those made directly from the Company's assets, and it includes the participants' share of the costs, which is funded by participant contributions. The amounts in the table are actuarially determined and reflect the Company's best estimate given its current knowledge; actual amounts could be materially different.

(In thousands)	Pension Benefits		Other Benefits		Medicare Subsidy Receipts
Employer Contributions
2012 (expectation) to participant benefits	$	16,031	$	3,276	$	—
Expected Benefit Payments / Receipts
2012		23,709		3,276		(294	)
2013		24,424		3,294		(305	)
2014		25,262		3,303		(308	)
2015		25,819		3,304		(321	)
2016		26,362		3,348		(334	)
2017-2021		140,866		15,625		(1,835	)

Net Periodic Cost

The following table provides the components of net periodic benefit cost for the Plans for fiscal years 2011, 2010, and 2009:

	Pension Benefits									Other Benefits
(In thousands)	2011			2010			2009			2011			2010			2009
Service cost	$	—		$	38		$	596		$	226		$	202		$	227
Interest cost		22,426			22,910			24,150			1,910			2,319			2,500
Expected return on plan assets		(23,996	)		(23,820	)		(23,682	)		—			—			—
Amortization of prior-service (credit) cost		—			—			(193	)		1,721			1,721			1,721
Amortization of net loss (gain)		3,794			2,671			2,625			(1,026	)		(691	)		(1,065	)
Curtailment gain		—			—			(2,000	)		—			—			—
Net periodic benefit cost	$	2,224		$	1,799		$	1,496		$	2,831		$	3,551		$	3,383

The net periodic costs for the Company's pension and other benefit plans were determined using the following assumptions:

	Pension Benefits						Other Benefits
	2011			2010			2011			2010
Discount rate		5.60	%		6.10	%		5.20	%		6.10	%
Expected return on plan assets		8.00			8.25			—			—
Compensation increase rate		—			—			3.50			4.00

The reasonableness of the expected return on the funded retirement plan assets was determined by four separate analyses: 1) review of 10 years of historical data of portfolios with similar asset allocation characteristics done by a third party, 2) analysis of 20 years of historical performance assuming the current portfolio mix and investment manager structure performed by a third party, 3) review of the Company's actual portfolio performance over the past five years, and 4) projected portfolio performance for 10 years, assuming the plan's asset allocation range, performed by a third party. Net periodic costs for 2012 will use a discount rate of 4.8%, and an expected rate of return on plan assets of 8.0%.

The Company also sponsors a 401(k) plan covering substantially all employees. The Company matched 100% of participant pretax contributions up to a maximum of 5% of the employee's salary until April 1, 2009 when the match was suspended. Effective January 1, 2011, the Company reinstated its match up to a maximum of 2% of the employee's salary. Eligible account balances may be rolled over from a prior employer's qualified plan. In 2011, contributions charged to expense under the plan were $2.6 million; in 2010, there were no contributions made to the plan and in 2009, contributions charged to expense under the plan were $2.4 million.