5. Investments

Investments in marketable securities

At December 28, 2012, and December 30, 2011, available-for-sale marketable securities consisted of the following:


	Amortized Cost		Unrealized Gain		Unrealized Loss			Fair Value
December 28, 2012
U.S. government debt obligations	$	31.1	$	—	$	—		$	31.1
Corporate debt obligations		9.5		0.1		—			9.6
Mortgaged backed debt obligations guaranteed by GNMA		54.9		0.6		—			55.5
Certificates of deposit guaranteed by FDIC		1.2		—		—			1.2
Foreign government debt obligations		159.3		1.8		—			161.1
Foreign corporate debt obligations guaranteed by foreign governments		121.5		0.7		—			122.2
Total	$	377.5	$	3.2	$	—		$	380.7
December 30, 2011
U.S. government debt obligations	$	195.2	$	0.5	$	—		$	195.7
Corporate debt obligations guaranteed by FDIC		66.6		0.2		—			66.8
Corporate debt obligations		201.4		0.8		(0.7	)		201.5
Mortgaged backed debt obligations guaranteed by GNMA		90.9		0.4		(0.1	)		91.2
Certificates of deposit guaranteed by FDIC		1.5		—		—			1.5
Foreign government debt obligations		221.5		1.5		—			223.0
Foreign corporate debt obligations guaranteed by foreign governments		64.1		0.2		(0.1	)		64.2
Total	$	841.2	$	3.6	$	(0.9	)	$	843.9

The following table summarizes the maturities of our available-for-sale marketable securities at December 28, 2012:


	Amortized Cost		Fair Value
Less than 12 months	$	117.1	$	117.4
Due in 1 to 5 years		205.5		207.8
Due after 5 years		54.9		55.5
Total	$	377.5	$	380.7

Gross unrealized gains and losses related to fixed-income securities were caused by interest rate fluctuations. No other-than-temporary impairments were recorded in 2012. We recognized other-than-temporary impairments of $1.2 million in 2011. No other-than-temporary impairments were recorded in 2010.

Investments in marketable securities with unrealized losses at December 28, 2012, were negligible. Investments in marketable securities with unrealized losses at December 30, 2011, were as follows:


	Unrealized Loss					Unrealized Loss				Fair Value		Total Unrealized Loss
	Less than 12 months					Greater than 12 months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 30, 2011
Corporate debt obligations	$	81.0	$	(0.7	)	$	—	$	—	$	81.0	$	(0.7	)
Mortgaged backed debt obligations guaranteed by GNMA		31.4		(0.1	)		—		—		31.4		(0.1	)
Foreign government debt obligations guaranteed by foreign governments		24.1		(0.1	)		—		—		24.1		(0.1	)
Total	$	136.5	$	(0.9	)	$	—	$	—	$	136.5	$	(0.9	)

The following table presents gross realized gains and losses related to fixed income investments:


	2012			2011			2010
Gross realized gains	$	4.4		$	3.8		$	14.9
Gross realized losses ¹		(1.3	)		(4.9	)		(2.7	)
Total	$	3.1		$	(1.1	)	$	12.2

¹	Includes other-than-temporary impairments of $1.2 million for the year ended December 30, 2011.

Other marketable securities and Loan related to other marketable securities

With the acquisition of Advanced Fibre Communications, Inc. (AFC) in 2004, we acquired 10.6 million shares of Cisco common stock, shown as Other marketable securities in Current Assets in our Consolidated Balance Sheets. Our Cisco common stock is classified as a trading security. In addition, we have a share loan arrangement with a financial institution for the same number of shares of Cisco common stock shown as Loan related to other marketable securities in Current Liabilities in our Consolidated Balance Sheets, which is due on demand.

As a result, we own the same number of Cisco shares as we have borrowed under the share loan arrangement; thereby, eliminating any market risk exposure associated with the share loan arrangement as increases (or decreases) in the value of Cisco stock are off-set equally by increases (or decreases) in the value of the shares of Cisco stock we own. In the event the counter-party financial institution to the share loan arrangement demands return of the borrowed Cisco shares, we will settle the obligation with our Cisco shares or with shares borrowed from another lender.

Other marketable securities and Loan related to other marketable securities was $195.1 million at a market price of $19.45 per share at December 28, 2012, and $190.9 million at a market price of $18.08 per share at December 30, 2011. The fees associated with the stock loan agreement were $1.2 million in 2012, $1.1 million in 2011 and $1.5 million in 2010, included in Interest income, net in the Consolidated Statements of Operations.

Additionally, in connection with our acquisition of AFC, we recorded a tax liability associated with a deferred gain relating to a settled hedging arrangement on the acquired Cisco shares. The deferred tax liability was $184.0 million as of December 28, 2012, and $195.2 million as of December 30, 2011.

The Cisco shares and related loan discussed above are maintained by us in order to defer recognition of the tax gain for income tax purposes. In the fourth quarter of 2012, we settled 0.6 million shares, reducing the number of borrowed shares to 10.0 million. In the future we may settle all or a portion of the remaining borrowed shares to the extent we are able to offset the gain by utilizing net operating loss or tax credit carryforwards. To the extent we cannot offset all or a portion of the gain, we may incur cash tax payments that could significantly reduce our cash and cash equivalents.

Long-term equity investments

In addition to the above investments, we maintain investments in partnerships and start-up technology companies. We include these investments in Other Assets, at cost. These investments totaled $1.8 million at December 28, 2012, and $3.2 million at December 30, 2011. We review each investment quarterly, including historical and projected financial performance, expected cash needs and recent funding events. We recognize other-than-temporary impairments if the market value of the investment is below its cost basis for an extended period of time or if the issuer has experienced significant financial declines or difficulties in raising capital to continue operations. We did not record other–than-temporary impairments for the year ended December 28, 2012. We recognized a gain of $3.0 million on the sale of a long-term equity investment for the year ended December 28, 2012. Other-than-temporary impairments were $1.0 million for the year ended December 30, 2011, and $3.8 million for the year ended December 31, 2010. Gains on the sale of long-term equity investments and other-than-temporary impairments are included in Other income (expense), net in the Consolidated Statements of Operations.