(7) Self-Insurance

While researching alternative methods to calculate retained claim liability for the Company’s self-insured workers compensation and general liability insurance programs, we discovered errors in the application of actuarial methods used to estimate the obligation of future payments resulting from claims due to past events. These errors primarily related to the Company’s selection of loss development factors and the application of such factors to the population of claims. The impact of these prior period misstatements to our consolidated financial statements resulted in the understatement of workers compensation and general liability expense with a corresponding understatement of self-insurance liabilities over multiple fiscal periods through June 27, 2015.

In accordance with applicable accounting guidance, an adjustment to the financial statements for each individual prior period presented is required to reflect the correction of the period-specific effects of the change, if material. Based on our evaluation of the relevant quantitative and qualitative factors, we determined the identified corrections are immaterial to the Company’s individual prior period consolidated financial statements, however, the cumulative correction of the prior period errors would be material to our current year Consolidated Statements of Income. Consequently, we have restated certain prior period amounts to correct these errors. Additionally, we have restated our retained earnings as of January 1, 2012 in the amount of $14.2 million.

The tables below summarize the effect of the restatement of previously reported consolidated financial statements for the fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012, the thirteen and thirty-nine weeks ended September 27, 2014, the thirteen and twenty-six weeks ended June 27, 2015 and June 28, 2014, and the thirteen weeks ended March 28, 2015 and March 29, 2014.


	As of June 27, 2015
	As Previously
Consolidated Balance Sheets (dollars in thousands)	Reported		Adjustment		As Restated
Accrued self-insurance	$	18,830	$	(746)	$	18,084
Deferred income taxes		7,318		315		7,633
Total current liabilities		203,320		(431)		202,889
Accrued self-insurance		-		22,364		22,364
Deferred income taxes		91,686		(9,292)		82,394
Total liabilities		316,816		12,641		329,457

Retained earnings		1,007,311		(12,641)		994,670
Total shareholders' equity		871,115		(12,641)		858,474
Total liabilities and shareholders' equity	$	1,187,931	$	-	$	1,187,931


	As of March 28, 2015
	As Previously
Consolidated Balance Sheets (dollars in thousands)	Reported		Adjustment		As Restated
Accrued self-insurance	$	19,597	$	(382)	$	19,215
Deferred income taxes		5,235		165		5,400
Total current liabilities		203,320		(217)		203,103
Accrued self-insurance		-		22,364		22,364
Deferred income taxes		97,451		(9,292)		88,159
Total liabilities		324,377		12,855		337,232

Retained earnings		998,950		(12,855)		986,095
Total shareholders' equity		862,886		(12,855)		850,031
Total liabilities and shareholders' equity	$	1,187,263	$	-	$	1,187,263


	As of December 27, 2014
	As Previously
Consolidated Balance Sheets (dollars in thousands)	Reported		Adjustment		As Restated
Accrued self-insurance	$	18,695	$	(19)	$	18,676
Deferred income taxes		5,800		16		5,816
Total current liabilities		210,617		(3)		210,614
Accrued self-insurance		-		22,364		22,364
Deferred income taxes		100,756		(9,292)		91,464
Total liabilities		333,287		13,069		346,356

Retained earnings		993,911		(13,069)		980,842
Total shareholders' equity		857,832		(13,069)		844,763
Total liabilities and shareholders' equity	$	1,191,119	$	-	$	1,191,119


	As of December 28, 2013
	As Previously
Consolidated Balance Sheets (dollars in thousands)	Reported		Adjustment		As Restated
Accrued self-insurance	$	19,333	$	(2,873)	$	16,460
Deferred income taxes		4,219		1,191		5,410
Total current liabilities		193,220		(1,682)		191,538
Accrued self-insurance		-		23,882		23,882
Deferred income taxes		97,934		(9,917)		88,017
Total liabilities		314,189		12,283		326,472

Retained earnings		971,022		(12,283)		958,739
Total shareholders' equity		834,053		(12,283)		821,770
Total liabilities and shareholders' equity	$	1,148,242	$	-	$	1,148,242


	13 Weeks Ended
Consolidated Statements of Income	June 27, 2015						June 28, 2014
(dollars in thousands,	As Previously						As Previously
except per share amounts)	Reported		Adjustment		As Restated		Reported		Adjustment		As Restated
Operating, general and administrative expenses	$	173,717	$	(364)	$	173,353	$	168,286	$	334	$	168,620
Income from operations		25,202		364		25,566		19,438		(334)		19,104
Income before provision for income taxes		25,787		364		26,151		20,094		(334)		19,760
Provision for income taxes		9,357		150		9,507		7,296		(138)		7,158
Net income	$	16,430	$	214	$	16,644	$	12,798	$	(196)	$	12,602
Basic and diluted earnings per share	$	0.61	$	0.01	$	0.62	$	0.48	$	(0.01)	$	0.47


	26 Weeks Ended
Consolidated Statements of Income	June 27, 2015						June 28, 2014
(dollars in thousands,	As Previously						As Previously
except per share amounts)	Reported		Adjustment		As Restated		Reported		Adjustment		As Restated
Operating, general and administrative expenses	$	349,331	$	(728)	$	348,603	$	332,701	$	668	$	333,369
Income from operations		44,703		728		45,431		41,741		(668)		41,073
Income before provision for income taxes		45,820		728		46,548		43,150		(668)		42,482
Provision for income taxes		16,281		300		16,581		15,586		(275)		15,311
Net income	$	29,539	$	428	$	29,967	$	27,564	$	(393)	$	27,171
Basic and diluted earnings per share	$	1.10	$	0.02	$	1.12	$	1.02	$	(0.01)	$	1.01


	13 Weeks Ended
Consolidated Statements of Income	March 28, 2015						March 29, 2014
(dollars in thousands,	As Previously						As Previously
except per share amounts)	Reported		Adjustment		As Restated		Reported		Adjustment		As Restated
Operating, general and administrative expenses	$	175,614	$	(364)	$	175,250	$	164,465	$	334	$	164,799
Income from operations		19,501		364		19,865		22,303		(334)		21,969
Income before provision for income taxes		20,033		364		20,397		23,056		(334)		22,722
Provision for income taxes		6,924		150		7,074		8,290		(138)		8,152
Net income	$	13,109	$	214	$	13,323	$	14,766	$	(196)	$	14,570
Basic and diluted earnings per share	$	0.49	$	0.01	$	0.50	$	0.55	$	(0.01)	$	0.54


	13 Weeks Ended						39 Weeks Ended
Consolidated Statements of Income	September 27, 2014						September 27, 2014
(dollars in thousands,	As Previously						As Previously
except per share amounts)	Reported		Adjustment		As Restated		Reported		Adjustment		As Restated
Operating, general and administrative expenses	$	165,733	$	334	$	166,067	$	498,433	$	1,002	$	499,435
Income from operations		19,944		(334)		19,610		61,685		(1,002)		60,683
Income before provision for income taxes		20,301		(334)		19,967		63,451		(1,002)		62,449
Provision for income taxes		6,594		(138)		6,456		22,180		(413)		21,767
Net income	$	13,707	$	(196)	$	13,511	$	41,271	$	(589)	$	40,682
Basic and diluted earnings per share	$	0.51	$	(0.01)	$	0.50	$	1.53	$	(0.02)	$	1.51


	For the year ended December 27, 2014
Consolidated Statements of Income	As Previously
(dollars in thousands, except per share amounts)	Reported		Adjustment		As Restated
Operating, general and administrative expenses	$	670,251	$	1,336	$	671,587
Income from operations		82,711		(1,336)		81,375
Income before provision for income taxes		84,998		(1,336)		83,662
Provision for income taxes		29,831		(550)		29,281
Net income	$	55,167	$	(786)	$	54,381
Basic and diluted earnings per share	$	2.05	$	(0.03)	$	2.02


	For the year ended December 28, 2013
Consolidated Statements of Income	As Previously
(dollars in thousands, except per share amounts)	Reported		Adjustment		As Restated
Operating, general and administrative expenses	$	634,286	$	(2,490)	$	631,796
Income from operations		111,182		2,490		113,672
Income before provision for income taxes		115,866		2,490		118,356
Provision for income taxes		44,145		1,025		45,170
Net income	$	71,721	$	1,465	$	73,186
Basic and diluted earnings per share	$	2.67	$	0.05	$	2.72


	For the year ended December 29, 2012
Consolidated Statements of Income	As Previously
(dollars in thousands, except per share amounts)	Reported		Adjustment		As Restated
Operating, general and administrative expenses	$	615,521	$	(661)	$	614,860
Income from operations		127,032		661		127,693
Income before provision for income taxes		130,914		661		131,575
Provision for income taxes		48,403		272		48,675
Net income	$	82,511	$	389	$	82,900
Basic and diluted earnings per share	$	3.07	$	0.01	$	3.08


	13 Weeks Ended
	March 28, 2015						March 29, 2014
Consolidated Statements of Cash Flows	As Previously						As Previously
(dollars in thousands)	Reported		Adjustment		As Restated		Reported		Adjustment		As Restated
Net income	$	13,109	$	214	$	13,323	$	14,766	$	(196)	$	14,570
Deferred income taxes		(3,880)		150		(3,730)		(1,308)		(138)		(1,446)
Accounts payable and other liabilities		(9,666)		(364)		(10,030)		(1,298)		334		(964)
Net cash provided by operating activities	$	31,026	$	-	$	31,026	$	34,192	$	-	$	34,192


	26 Weeks Ended
	June 27, 2015						June 28, 2014
Consolidated Statements of Cash Flows	As Previously						As Previously
(dollars in thousands)	Reported		Adjustment		As Restated		Reported		Adjustment		As Restated
Net income	$	29,539	$	428	$	29,967	$	27,564	$	(393)	$	27,171
Deferred income taxes		(7,469)		300		(7,169)		(3,887)		(275)		(4,162)
Accounts payable and other liabilities		(13,512)		(728)		(14,240)		(11,246)		668		(10,578)
Net cash provided by operating activities	$	63,918	$	-	$	63,918	$	55,723	$	-	$	55,723


	39 Weeks Ended
	September 27, 2014
Consolidated Statement of Cash Flows	As Previously
(dollars in thousands)	Reported		Adjustment		As Restated
Net income	$	41,271	$	(589)	$	40,682
Deferred income taxes		371		(413)		(42)
Accounts payable and other liabilities		(7,524)		1,002		(6,522)
Net cash provided by operating activities	$	91,670	$	-	$	91,670


	For the year ended December 27, 2014
Consolidated Statement of Cash Flows	As Previously
(dollars in thousands)	Reported		Adjustment		As Restated
Net income	$	55,167	$	(786)	$	54,381
Deferred income taxes		3,785		(550)		3,235
Accounts payable and other liabilities		15,894		1,336		17,230
Net cash provided by operating activities	$	123,110	$	-	$	123,110


	For the year ended December 28, 2013
Consolidated Statement of Cash Flows	As Previously
(dollars in thousands)	Reported		Adjustment		As Restated
Net income	$	71,721	$	1,465	$	73,186
Deferred income taxes		10,377		1,025		11,402
Accounts payable and other liabilities		9,546		(2,490)		7,056
Net cash provided by operating activities	$	142,632	$	-	$	142,632


	For the year ended December 29, 2012
Consolidated Statement of Cash Flows	As Previously
(dollars in thousands)	Reported		Adjustment		As Restated
Net income	$	82,511	$	389	$	82,900
Deferred income taxes		15,611		272		15,883
Accounts payable and other liabilities		(5,045)		(661)		(5,706)
Net cash provided by operating activities	$	123,961	$	-	$	123,961