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 income taxes as other comprehensive losses and included as a component of stockholders’ equity.

Interest and dividend income, amortization of premiums, accretion of discounts and realized gains and losses on AFS securities are included in investment income. Interest income is accrued as earned. Dividend income is recognized as income on the ex-dividend date of the equity security. The cost of AFS securities sold is based on the first-in, first-out method.

Following is a summary of AFS securities as of March 28, 2015 and December 27, 2014:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Amounts are in thousands)
March 28, 2015
Tax exempt bonds	$	3,358,175		18,210		3,638	3,372,747
Taxable bonds	1,923,064			5,736		1,673	1,927,127
Restricted investments	170,000			—		1,121	168,879
Equity securities	1,276,670			165,798		11,650	1,430,818
	$	6,727,909		189,744		18,082	6,899,571
December 27, 2014
Tax exempt bonds	$	3,205,647		17,460		4,011	3,219,096
Taxable bonds	1,569,828			3,005		4,592	1,568,241
Restricted investments	170,000			—		776	169,224
Equity securities	1,092,985			191,493		10,309	1,274,169
	$	6,038,460		211,958		19,688	6,230,730

Realized gains on sales of AFS securities totaled $16,266,000 for the three months ended March 28, 2015. Realized losses on sales of AFS securities totaled $892,000 for the three months ended March 28, 2015.

Realized gains on sales of AFS securities totaled $6,173,000 for the three months ended March 29, 2014. Realized losses on sales of AFS securities totaled $571,000 for the three months ended March 29, 2014.

The amortized cost and fair value of AFS securities by expected maturity as of March 28, 2015 and December 27, 2014 are as follows:



	March 28, 2015			December 27, 2014
	Amortized Cost		Fair Value	Amortized Cost	Fair Value
	(Amounts are in thousands)
Due in one year or less	$	1,053,686	1,055,958	996,674	999,169
Due after one year through five years	3,866,476		3,881,250	3,493,708	3,501,821
Due after five years through ten years	264,836		264,805	183,552	183,168
Due after ten years	96,241		97,861	101,541	103,179
	5,281,239		5,299,874	4,775,475	4,787,337
Restricted investments	170,000		168,879	170,000	169,224
Equity securities	1,276,670		1,430,818	1,092,985	1,274,169
	$	6,727,909	6,899,571	6,038,460	6,230,730

Following is a summary of temporarily impaired AFS securities by the time period impaired as of March 28, 2015 and December 27, 2014:



	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 28, 2015
Tax exempt bonds	$	602,522		2,696	82,148		942	684,670		3,638
Taxable bonds	522,279			1,250	69,398		423	591,677		1,673
Restricted investments	168,879			1,121	—		—	168,879		1,121
Equity securities	113,280			9,330	7,789		2,320	121,069		11,650
Total temporarily impaired AFS securities	$	1,406,960		14,397	159,335		3,685	1,566,295		18,082
December 27, 2014
Tax exempt bonds	$	689,909		2,359	93,454		1,652	783,363		4,011
Taxable bonds	936,512			3,666	68,035		926	1,004,547		4,592
Restricted investments	169,224			776	—		—	169,224		776
Equity securities	107,352			8,373	6,229		1,936	113,581		10,309
Total temporarily impaired AFS securities	$	1,902,997		15,174	167,718		4,514	2,070,715		19,688

There are 252 AFS securities issues contributing to the total unrealized loss of $18,082,000 as of March 28, 2015. Unrealized losses related to debt securities are primarily due to interest rate volatility impacting the market value of certain bonds. The Company continues to receive scheduled principal and interest payments on these debt securities. Unrealized losses related to equity securities are primarily due to temporary equity market fluctuations that are expected to recover.