10.   Fair Value Measurements

  

The Accounting Standards Code (ASC) 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).  The ASC 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 September 26, 2009
Description	Total	Level 1	Level 2	Level 3
Available for-sale securites	$          721,534	$      721,534	-	-
Failed Auction rate securities	66,553	-	-	66,553
Total	$          788,087	$      721,534	$            -	$    66,553

  

For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, the ASC 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		39-Weeks Ended
		September 26, 2009		September 26, 2009
Beginning balance of auction rate securities		$67,829		$                      71,303
Total unrealized losses included in other
comprehensive income		(1,276)		(4,750)
Purchases in and/or out of Level 3		-		-
Transfers in and/or out of Level 3		-		-
Ending balance of auction rate securities		$66,553		$66,553

                The following is a summary of the company’s marketable securities classified as available-for-sale securities at September 26, 2009:

				Gross		Gross		Other Than		Estimated Fair
				Unrealized		Unrealized		Temporary		Value (Net
		Amortized Cost		Gains		Losses		Impairment		Carrying Amount)
Mortgage-backed securities		$450,788		$3,543		($1,912)		-		$452,419
Auction rate securities		92,100		-		(25,548)		-		66,552
Obligations of states and political subdivisions		210,034		1,138		(113)		-		211,059
U.S. corporate bonds		35,285		789		(962)		(1,274)		33,838
Other		23,126		1,259		(166)		-		24,219
Total		$811,333		$6,729		($28,701)		($1,274)		$788,087

  

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
				Unrealized		Unrealized		Temporary		Value (Net
		Amortized Cost		Gains		Losses		Impairment		Carrying 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 September 26, 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	$28,459		$29,763
Due after one year through five years	280,383		256,171
Due after five years through ten years	297,331		297,497
Due after ten years	205,160		204,656
	$811,333		$788,087

  

                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.