Investments

9 Months Ended

Sep. 24, 2011

Investments [Abstract]

Investments

(4)    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 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.

On December 29, 2010, the Company funded a restricted trust account in the amount of $170,000,000 for the benefit of its insurance carrier related to the Company's workers' compensation self-insurance reserves in lieu of providing a standby letter of credit or other security. The restricted trust account is invested in a mutual fund primarily comprised of short-term, investment grade bonds. Earnings from the investments held in the restricted trust account are paid to the Company in accordance with the terms of the trust agreement.

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 September 24, 2011 and December 25, 2010:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Amounts are in thousands)
September 24, 2011
Tax exempt bonds		$2,313,049		37,114		287		2,349,876
Taxable bonds		1,200,884		22,219		710		1,222,393
Restricted investments		170,000		—		1,294		168,706
Equity securities		262,670		21,967		24,523		260,114
		$3,946,603		81,300		26,814		4,001,089
December 25, 2010
Tax exempt bonds		$1,932,466		13,308		8,322		1,937,452
Taxable bonds		867,430		16,108		2,542		880,996
Equity securities		219,737		60,536		2,688		277,585
		$3,019,633		89,952		13,552		3,096,033

Realized gains on sales of AFS securities totaled $7,260,000 and $6,743,000 for the three months ended September 24, 2011 and September 25, 2010, respectively, and $29,996,000 and $22,492,000 for the nine months ended September 24, 2011 and September 25, 2010, respectively. Realized losses on sales and OTTI of AFS securities totaled $8,148,000 and $1,875,000 for the three months ended September 24, 2011 and September 25, 2010, respectively, and $10,324,000 and $2,539,000 for the nine months ended September 24, 2011 and September 25, 2010, respectively. The Company recorded OTTI losses on equity securities of $6,082,000 for the three and nine months ended September 24, 2011. There were no OTTI losses on equity securities for the three and nine months ended September 25, 2010. There were no OTTI losses on debt securities for the three and nine months ended September 24, 2011 and September 25, 2010.

The amortized cost and fair value of AFS securities by expected maturity as of September 24, 2011 and December 25, 2010 are as follows:

	September 24, 2011				December 25, 2010
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Amounts are in thousands)
Due in one year or less		$   436,213		438,579		332,992		336,282
Due after one year through five years		2,205,143		2,239,882		1,499,176		1,506,731
Due after five years through ten years		369,551		376,171		337,677		335,056
Due after ten years		503,026		517,637		630,051		640,379
		3,513,933		3,572,269		2,799,896		2,818,448
Restricted investments		170,000		168,706		—		—
Equity securities		262,670		260,114		219,737		277,585
		$3,946,603		4,001,089		3,019,633		3,096,033

Following is a summary of temporarily impaired AFS securities by the time period impaired as of September 24, 2011 and December 25, 2010:

	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 24, 2011
Tax exempt bonds	$	77,805		278		5,844		9		83,649		287
Taxable bonds		158,499		710		—		—		158,499		710
Restricted investments		168,706		1,294		—		—		168,706		1,294
Equity securities		135,282		23,521		2,926		1,002		138,208		24,523
Total temporarily impaired AFS securities	$	540,292		25,803		8,770		1,011		549,062		26,814
December 25, 2010
Tax exempt bonds	$	624,553		8,321		54		1		624,607		8,322
Taxable bonds		155,160		2,045		4,130		497		159,290		2,542
Equity securities		30,065		1,914		3,571		774		33,636		2,688
Total temporarily impaired AFS securities	$	809,778		12,280		7,755		1,272		817,533		13,552

There are 364 AFS securities issues contributing to the total unrealized loss of $26,814,000 as of September 24, 2011. 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.