Long-Term Debt

12 Months Ended

Dec. 25, 2011

(9) Long-Term Debt

Components of long-term debt are as follows:

	2011		2010
	-------		------
	Carrying	Fair	Carrying	Fair
	Cost	Value	Cost	Value
	----------	---------	----------	---------
6.35% Notes Due 2040	$ 500,000	540,850	500,000	499,900
6.125% Notes Due 2014	440,977	462,868	437,786	462,698
6.30% Notes Due 2017	350,000	400,400	350,000	382,830
6.60% Debentures Due 2028	109,895	120,148	109,895	110,038
	--------------	-------------	-------------	-------------
Total long-term debt	$1,400,872	1,524,266	1,397,681	1,455,466
	========	=======	=======	=======

The carrying cost of the 6.125% Notes Due 2014 include principal amounts of $425,000 as well as fair value adjustments of $15,977 and $12,786 at December 25, 2011 and December 26, 2010, respectively, related to interest rate swaps. All other carrying costs represent principal amounts. Total principal amounts of long-term debt at December 25, 2011 and December 26, 2010 were $1,384,895.

The fair values of the Company’s long-term borrowings are measured using a combination of broker quotations when available and discounted future cash flows. The fair value of the interest rate swaps are measured based on the present value of future cash flows using the swap curve as of the date of valuation.

In March 2010 the Company issued $500,000 of Notes that are due in 2040 (the "Notes"). The Notes bear interest at a rate of 6.35%. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase.

Interest rates for the 6.125% Notes Due 2014 and the 6.30% Notes Due 2017 may be adjusted upward in the event that the Company's credit rating from Moody's Investor Services, Inc., Standard & Poor's Ratings Services or Fitch Ratings is reduced to Ba1, BB+, or BB+, respectively, or below. At December 25, 2011, the Company’s ratings from Moody’s Investor Services, Inc., Standard & Poor’s Rating Services and Fitch ratings were Baa2, BBB+, and BBB+, respectively. The interest rate adjustment is dependent on the degree of decrease of the Company’s ratings and could range from 0.25% to a maximum of 2.00%. The Company may redeem these notes at its option at the greater of the principal amount of these notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase.

The Company is party to a series of interest rate swap agreements to adjust the amount of debt that is subject to fixed interest rates. The interest rate swaps are matched with the 6.125% Notes Due 2014 and accounted for as fair value hedges of those notes. The interest rate swaps have a total notional amount of $400,000 with maturities in 2014. In each of the contracts, the Company receives payments based upon a fixed interest rate of 6.125%, which matches the interest rate of the notes being hedged, and makes payments based upon a floating rate based on Libor. These contracts are designated and effective as hedges of the change in the fair value of the associated debt. At December 25, 2011 and December 26, 2010, the fair value of these contracts was an asset of $15,977 and $12,786, respectively, which is recorded in other assets with a corresponding fair value adjustment to increase long-term debt. The Company recorded a (gain) loss of $(3,191), $(15,511) and $2,725 on these instruments in other (income) expense, net for the years ended December 25, 2011, December 26, 2010 and December 27, 2009, respectively, relating to the change in fair value of the interest rate swaps, wholly offsetting gains and losses from the change in fair value of the associated long-term debt.

At December 25, 2011, as detailed above, the Company’s 6.125% Notes mature in 2014. All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to 2016.