Investments

All of the Company’s debt 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 tax, 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 stock. The cost of AFS securities sold is based on the first-in, first-out method.

Following is a summary of AFS securities as of March 30, 2013 and December 29, 2012:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Amounts are in thousands)
March 30, 2013
Tax exempt bonds	$	3,361,235		35,608		2,328	3,394,515
Taxable bonds	1,373,007			15,628		561	1,388,074
Restricted investments	170,000			604		—	170,604
Equity securities	573,144			105,423		7,104	671,463
	$	5,477,386		157,263		9,993	5,624,656
December 29, 2012
Tax exempt bonds	$	3,115,963		33,787		2,646	3,147,104
Taxable bonds	1,141,514			17,667		355	1,158,826
Restricted investments	170,000			431		—	170,431
Equity securities	510,613			58,631		12,499	556,745
	$	4,938,090		110,516		15,500	5,033,106

Realized gains on sales of AFS securities totaled $6,862,000 for the three months ended March 30, 2013. Realized losses on sales of AFS securities totaled $4,203,000 for the three months ended March 30, 2013. There were no OTTI losses on AFS securities for the three months ended March 30, 2013.

Realized gains on sales of AFS securities totaled $2,549,000 for the three months ended March 31, 2012. Realized losses on sales of AFS securities totaled $2,311,000 for the three months ended March 31, 2012. There were no OTTI losses on AFS securities for the three months ended March 31, 2012.

The amortized cost and fair value of AFS securities by expected maturity as of March 30, 2013 and December 29, 2012 are as follows:



	March 30, 2013			December 29, 2012
	Amortized Cost		Fair Value	Amortized Cost	Fair Value
	(Amounts are in thousands)
Due in one year or less	$	887,725	892,094	792,946	797,260
Due after one year through five years	3,159,145		3,191,548	2,725,036	2,755,043
Due after five years through ten years	474,711		479,469	520,800	526,924
Due after ten years	212,661		219,478	218,695	226,703
	4,734,242		4,782,589	4,257,477	4,305,930
Restricted investments	170,000		170,604	170,000	170,431
Equity securities	573,144		671,463	510,613	556,745
	$	5,477,386	5,624,656	4,938,090	5,033,106

Following is a summary of temporarily impaired AFS securities by the time period impaired as of March 30, 2013 and December 29, 2012:



	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 30, 2013
Tax exempt bonds	$	323,493		2,328	—		—	323,493		2,328
Taxable bonds	243,368			561	—		—	243,368		561
Equity securities	55,763			3,915	9,117		3,189	64,880		7,104
Total temporarily impaired AFS securities	$	622,624		6,804	9,117		3,189	631,741		9,993
December 29, 2012
Tax exempt bonds	$	566,914		2,646	—		—	566,914		2,646
Taxable bonds	81,876			355	—		—	81,876		355
Equity securities	209,759			8,878	14,260		3,621	224,019		12,499
Total temporarily impaired AFS securities	$	858,549		11,879	14,260		3,621	872,809		15,500

There are 242 AFS securities issues contributing to the total unrealized loss of $9,993,000 as of March 30, 2013. Unrealized losses related to debt securities are primarily driven by 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 driven by stock market volatility.