Securities

9 Months Ended

Sep. 25, 2011

Securities

Securities

Note 7 – Securities

The company invests excess cash in marketable securities consisting primarily of money markets, commercial paper, corporate notes and bonds, and U.S. government securities. While the company still holds auction rate securities, the company no longer actively invests in them.

All of the company's securities are classified as available-for-sale. In accordance with the Investments – Debt and Equity Securities Topic of the FASB ASC, available-for-sale securities are carried at fair value with unrealized gains and losses included as a component of AOCI within stockholders' equity, net of any related tax effect, if such gains and losses are considered temporary. Realized gains and losses on these investments are included in interest income and expense. Declines in value judged by management to be other-than-temporary and credit related are included in impairment of investments in the statement of operations. The noncredit component of impairment is included in AOCI. For the purpose of computing realized gains and losses, cost is identified on a specific identification basis. There were no material realized gains or losses on sales of securities in the first nine months of 2011 or 2010.

Securities are summarized as of September 25, 2011:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.2	$	—	$	—		$	0. 2
Total marketable securities	$	0.2	$	0.0	$	0.0		$	0.2
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.8	$	0.4	$	—		$	2.2
Corporate debt securities		0.3		—		—			0.3
Auction rate securities		35.7		—		(6.7	)		29.0
Total securities	$	37.8	$	0.4	$	(6.7	)	$	31.5

In aggregate, the auction rate securities have been in an unrealized loss position for over a year. The continued unrealized loss is attributable to the ongoing volatility in the global equities markets and uncertainty in the credit markets primarily from the European debt situation and other global economic uncertainty. However, the company does not intend to sell or believe it is more likely than not that the company would be required to sell the securities before a recovery of the amortized cost basis of the investment. In addition, as a result of the continued performance of the issue and its' insurance guarantee, the company considers this decrease in fair value to be temporary in nature.

Securities are summarized as of December 26, 2010:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Market Value
	(In millions)
Short-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	0.1	$	—	$	—	$	0.1
Total marketable securities	$	0.1	$	—	$	—	$	0.1

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
	(In millions)
Long-term available for sale securities:
U.S. Treasury securities and obligations of U.S. government agencies	$	1.9	$	0.1	$	—		$	2.0
Corporate debt securities		0.3		—		—		$	0.3
Auction rate securities		35.3		—		(7.3	)		28.0
Total securities	$	37.5	$	0.1	$	(7.3	)	$	30.3

The following table presents the amortized cost and estimated fair market value of available-for-sale securities by contractual maturity as of September 25, 2011.

	Amortized Cost		Market Value
	(In millions)
Due in one year or less	$	0.2	$	0.2
Due after one year through three years		0.3		0.4
Due after three years through ten years		1.3		1.4
Due after ten years	$	36.2	$	29.7
	$	38.0	$	31.7

As of September 25, 2011, auction rate securities with a market value of $29.0 million are included in the table above in contractual maturities due after ten years. The company's auction rate securities are composed of approximately $16.9 million of securities that are structured obligations of special purpose reinsurance entities associated with life insurance companies and $12.1 million of corporate debt securities issued by a special purpose financial services corporation that offers credit risk protection through writing credit derivatives. The company continues to accrue and receive interest on these securities based on a contractual rate.

In the fourth quarter of 2008, the company concluded that the impairment of its auction rate securities was other-than-temporary and recognized a loss of $19.0 million in the income statement. However, the company does not intend to sell or believe it is more likely than not that the company would be required to sell the securities before a recovery of the amortized cost basis of the investment. In the second quarter of 2009, based on the requirements of the Investments – Debt and Equity Securities Topic of the FASB ASC, the company analyzed the $19.0 million other-than-temporary loss that was recognized in the income statement in the fourth quarter of 2008 to determine the noncredit component. It was determined that $15.5 million of the loss was attributable to credit loss. As a result, in the second quarter of 2009, a cumulative adjustment of the remaining $3.5 million, which was attributable to changes in interest rates, was reclassified from retained earnings to AOCI. There is no portion of other-than-temporary impairment related to credit loss currently included in AOCI.

The following table presents a roll forward of the amount related to credit losses recognized in earnings during the nine months ended September 25, 2011.

	Credit Losses Recognized in Earnings
	(In millions)
Balance at beginning of period	$	14.5
Accretion of impairments included in net income		(0.4	)
Balance at end of period	$	14.1