
(4)	Investments

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 June 25, 2016 and December 26, 2015:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Amounts are in thousands)
June 25, 2016
Tax exempt bonds	$	3,442,442		26,723		559	3,468,606
Taxable bonds	2,393,982			12,471		1,141	2,405,312
Restricted investments	164,549			1,389		—	165,938
Equity securities	898,622			87,844		29,205	957,261
	$	6,899,595		128,427		30,905	6,997,117
December 26, 2015
Tax exempt bonds	$	3,336,841		12,038		2,737	3,346,142
Taxable bonds	2,214,366			1,492		10,399	2,205,459
Restricted investments	164,548			—		1,389	163,159
Equity securities	836,153			78,378		26,357	888,174
	$	6,551,908		91,908		40,882	6,602,934

Realized gains on sales of AFS securities totaled $2,633,000 and $11,884,000 for the three and six months ended June 25, 2016, respectively. Realized losses on sales of AFS securities totaled $1,442,000 and $4,997,000 for the three and six months ended June 25, 2016, respectively.

Realized gains on sales of AFS securities totaled $27,656,000 and $43,922,000 for the three and six months ended June 27, 2015, respectively. Realized losses on sales of AFS securities totaled $4,787,000 and $5,679,000 for the three and six months ended June 27, 2015, respectively.

The amortized cost and fair value of AFS securities by expected maturity as of June 25, 2016 and December 26, 2015 are as follows:



	June 25, 2016			December 26, 2015
	Amortized Cost		Fair Value	Amortized Cost	Fair Value
	(Amounts are in thousands)
Due in one year or less	$	1,462,861	1,464,791	1,375,450	1,376,698
Due after one year through five years	3,972,098		4,002,436	3,951,600	3,948,654
Due after five years through ten years	381,423		385,783	161,732	162,999
Due after ten years	20,042		20,908	62,425	63,250
	5,836,424		5,873,918	5,551,207	5,551,601
Restricted investments	164,549		165,938	164,548	163,159
Equity securities	898,622		957,261	836,153	888,174
	$	6,899,595	6,997,117	6,551,908	6,602,934

Following is a summary of temporarily impaired AFS securities by the time period impaired as of June 25, 2016 and December 26, 2015:



	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)
June 25, 2016
Tax exempt bonds	$	90,715		532	11,641		27	102,356		559
Taxable bonds	140,993			153	132,257		988	273,250		1,141
Equity securities	357,222			18,644	33,989		10,561	391,211		29,205
	$	588,930		19,329	177,887		11,576	766,817		30,905
December 26, 2015
Tax exempt bonds	$	890,907		2,264	63,474		473	954,381		2,737
Taxable bonds	1,676,719			9,988	70,309		411	1,747,028		10,399
Restricted investments	163,159			1,389	—		—	163,159		1,389
Equity securities	274,517			20,561	16,112		5,796	290,629		26,357
	$	3,005,302		34,202	149,895		6,680	3,155,197		40,882

There are 167 AFS securities contributing to the total unrealized loss of $30,905,000 as of June 25, 2016. 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.