Note 5 - Marketable Securities

6 Months Ended

Jul. 01, 2011

Marketable Securities [Text Block]

5. Marketable Securities

The Company’s investment policy focuses on three objectives:  to preserve capital, to meet liquidity requirements and to maximize total return.  The Company’s investment policy establishes minimum ratings for each classification of investments when purchased and investment concentration is limited to minimize risk.  The policy also limits the final maturity on any investment and the overall duration of the portfolio.  Given the overall market conditions, the Company regularly reviews its investment portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis and proper valuation.

The Company’s portfolio of marketable securities at July 1, 2011 was as follows:

	Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Available-for-Sale Marketable Securities:
Short-term deposits	$	1,191		$	-	$	-		$	1,191
United States government securities		351,354			436		(50	)		351,740
Government agencies		3,511			35		-			3,546
Corporate obligations		1,528			14		-			1,542
Total available-for-sale securities		357,584			485		(50	)		358,019
Amounts classified as cash equivalents		(1,077	)		-		-			(1,077	)
Amounts classified as marketable securities	$	356,507		$	485	$	(50	)	$	356,942

The Company’s portfolio of marketable securities at December 31, 2010 was as follows:

	Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Available-for-Sale Marketable Securities:
Short-term deposits	$	5,737		$	-	$	-		$	5,737
United States government securities		57,379			409		(32	)		57,756
Government agencies		53,065			308		(51	)		53,322
Mortgage-backed securities		32,161			141		(36	)		32,266
State and municipalities		4,021			2		(39	)		3,984
Corporate obligations		183,971			1,122		(117	)		184,976
Asset-backed securities		492			17		-			509
Total available-for-sale securities		336,826			1,999		(275	)		338,550
Amounts classified as cash equivalents		(24,415	)		-		-			(24,415	)
Amounts classified as marketable securities	$	312,411		$	1,999	$	(275	)	$	314,135

Sales of marketable securities resulted in gross realized gains of $1.5 million and $2.0 million during the three-month and six-month periods ended July 1, 2011, respectively, and $0.1 million and $0.2 million during the three-month and six-month periods ended July 2, 2010, respectively.  Sales of marketable securities resulted in gross realized losses of $0.2 million and $0.3 million during the three-month and six-month periods ended July 1, 2011, respectively, and $0.4 million for the three-month and six-month periods ended July 2, 2010.

The following table summarizes the fair value and gross unrealized losses of the Company’s available-for-sale marketable securities, aggregated by type of investment instrument and length of time that individual securities have been in a continuous unrealized loss position, at July 1, 2011:

	Less than 12 Months					12 Months or Greater				Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in thousands)
United States government securities	$	198,376	$	(50	)	$	-	$	-	$	198,376	$	(50	)

The following table summarizes the fair value and gross unrealized losses of the Company’s available-for-sale marketable securities, aggregated by type of investment instrument and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2010:

	Less than 12 Months					12 Months or Greater				Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in thousands)
United States government securities	$	12,793	$	(32	)	$	-	$	-	$	12,793	$	(32	)
Government agencies		17,977		(51	)		-		-		17,977		(51	)
Mortgage-backed securities		11,019		(36	)		-		-		11,019		(36	)
State and municipalities		2,843		(39	)		-		-		2,843		(39	)
Corporate obligations		36,815		(117	)		-		-		36,815		(117	)
Total	$	81,447	$	(275	)	$	-	$	-	$	81,447	$	(275	)

The Company’s investment portfolio consists of both corporate and government securities that generally mature within three years.  The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields.  As yields increase, those securities purchased with a lower yield-at-cost show a mark-to-market unrealized loss.  All unrealized losses are due to changes in interest rates and bond yields.  The Company has considered all available evidence and determined that the marketable securities in which unrealized losses were recorded in the three-month and six-month periods ended July 1, 2011 and July 2, 2010 were not deemed to be other-than-temporary. The Company holds its marketable securities as available-for-sale and marks them to market.

The amortized cost and estimated fair value of investments in available-for-sale debt securities at July 1, 2011 and December 31, 2010, by contractual maturity, were as follows:

	July 1, 2011				December 31, 2010
			Estimated				Estimated
	Cost		Fair Value		Cost		Fair Value
	(in thousands)
Mature in one year or less	$	279,442	$	279,580	$	149,441	$	149,900
Mature after one year through three years		78,142		78,439		184,162		185,436
Mature after three years through five years		-		-		3,223		3,214
Total	$	357,584	$	358,019	$	336,826	$	338,550

The maturities of asset-backed and mortgage-backed securities were estimated primarily based upon assumed prepayment forecasts utilizing interest rate scenarios and mortgage loan characteristics.