Fair Value Measurements

6 Months Ended

Jun. 27, 2009

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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10. Fair Value Measurements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements. The Company adopted SFAS No. 157 effective December 30, 2007.

SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). SFAS No. 157 classifies the inputs used to measure fair value into the following hierarchy:

Level 1

Unadjusted quoted prices in active markets for identical assets or liability

Level 2

Unadjusted quoted prices in active markets for similar assets or liabilities, or

Unadjusted quoted prices for identical or similar assets

Level 3

Unobservable inputs for the asset or liability

The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

For fair value measurements using significant unobservable inputs, an independent third party provided the valuation. The inputs used in the valuations used the following methodology. The collateral composition was used to estimate Weighted Average Life based on historical and projected payment information. Cash flows were projected for the issuing trusts, taking into account underlying loan principal, bonds outstanding, and payout formulas. Taking this information into account, assumptions were made as to the yields likely to be required, based upon then current market conditions for comparable or similar term Asset Based Securities as well as other fixed income securities.

Assets and liabilities measured at estimated fair value on a recurring basis are summarized below:

	Fair Value Measurements as
	of June 27, 2009

Description	Total		Level 1		Level 2		Level 3

Available for-sale securites	$	475,995	$	475,995		-		-
Failed Auction rate securities		67,829		-		-		67,829

Total	$	543,824	$	475,995	$	-	$	67,829

For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, SFAS No. 157 requires a reconciliation of the beginning and ending balances, separately for each major category of assets. The reconciliation is as follows:

	Fair Value Measurements Using
	Significant Unobservable Inputs (Level 3)
	13-Weeks Ended		26-Weeks Ended
	June 27, 2009		June 27, 2009

Beginning balance of auction rate securities	$	65,544	$	71,303
Total unrealized losses included in other comprehensive income		2,285		(3,474	)
Purchases in and/or out of Level 3		-		-
Transfers in and/or out of Level 3		-		-
Ending balance of auction rate securities	$	67,829	$	67,829

The following is a summary of the company’s marketable securities classified as available-for-sale securities at June 27, 2009:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment			Estimated Fair Value (Net Carrying Amount)
Mortgage-backed securities	$	337,865	$	1,499	$	(2,904	)		-		$	336,460
Auction rate securities		92,750		-		(24,921	)		-			67,829
Obligations of states and political subdivisions		85,961		685		(430	)		-			86,216
U.S. corporate bonds		33,555		367		(1,372	)		(1,274	)		31,276
Other		22,157		273		(387	)		-			22,043
Total	$	572,288	$	2,824	$	(30,014	)	$	(1,274	)	$	543,824

The following is a summary of the company’s marketable securities classified as available-for-sale securities at December 27, 2008:

			Gross		Gross			Other Than		Estimated Fair Value (Net
	Amortized		Unrealized		Unrealized			Temporary		Carrying
	Cost		Gains		Losses			Impairment		Amount)
Mortgage-backed securities	$	137,854	$	1,184	$	(140	)		-	$	138,898
Auction rate securities		92,850		-		(21,547	)		-		71,303
Obligations of states and political subdivisions		40,336		960		(12	)		-		41,284
U.S. corporate bonds		16,545		200		(2,707	)		-		14,038
Other		9,502		79		(209	)		-		9,372
Total	$	297,087	$	2,423	$	(24,615	)	$	0	$	274,895

The cost of securities sold is based on the specific identification method.

The unrealized losses on the Company’s investment in 2008 and year-to-date 2009 were caused primarily by changes in interest rates, specifically, widening credit spreads. The Company’s investment policy requires investments to be rated A or better with the objective of minimizing the potential risk of principal loss. Therefore, the Company considers the declines to be temporary in nature. Fair values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company review factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, and the Company’s ability and intent to hold the investment for a period of time, which may be sufficient for anticipated recovery in market value. During 2008 and year-to-date 2009, the Company did not record any material impairment charges on its outstanding securities.

The amortized cost and estimated fair value of marketable securities at June 27, 2009, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

			Estimated
	Cost		Fair Value

Due in one year or less	$	28,756	$	28,909
Due after one year through five years		243,194		217,733
Due after five years through ten years		151,202		149,890
Due after ten years		149,136		147,292
	$	572,288	$	543,824

For certain of the Company’s financial instruments, including accounts receivable, accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their short maturities.