ARPS are a type of ARS that have an underlying asset of perpetual preferred stock.  In the event of default or liquidation of the collateral by the ARS issuer or trustee, the Company is entitled to receive non-convertible preferred shares in the ARS issuer.  Lehman Brothers Holdings, Inc. ("Lehman") (which filed for Chapter 11 bankruptcy protection during September 2008) acted as the broker and auction agent for all of the ARPS held by the Company.  The Lehman bankruptcy has resulted in the dissolution of the investment trust for the Freddie Mac ARPS and distribution of the underlying Freddie Mac preferred stock.  Consequently, the Company received 160,000 preferred shares of Freddie Mac.  At November 1, 2008, the Freddie Mac preferred shares were no longer paying dividends.  We valued these shares based on their quoted market price at the end of the quarter.  Due to the liquidation of the trust and the receipt of the underlying preferred shares, as well as the significance of the price decline, we recorded an OTTI charge of $3.9 million. 

Furthermore, as a result of the Lehman bankruptcy, it is probable that the respective trust of each of our remaining ARPS (with the exception of two non-Lehman trust investments) will be dissolved at the next auction date and we will receive the underlying preferred stock of the respective issuer.  All of these issues of preferred stock are publicly traded and have experienced a significant decline in value.  Since it is unlikely that these investments will recover in value in the near term, we recorded an OTTI charge of $16.0 million based on the closing market price for the preferred shares on October 31, 2008.

OCI Charges: 

As a result of the current market conditions, we recorded a net year-to-date temporary impairment of $30.0 million in connection with the valuation of our ARS portfolio at November 1, 2008.  We used a discounted cash flow ("DCF") model to value these investments.  The assumptions in our model included different recovery periods depending on the type of security and varying discount factors for yield and illiquidity.  These assumptions are subjective.  They are based on our current judgment and our view of current market conditions.  The use of different assumptions would result in a different valuation and related charge. 

Based on the belief that our ARS investments can be liquidated through successful auctions or redemptions at par plus accrued interest, and on our ability and intent to hold these investments until such liquidation, we believe that the current illiquidity and impairment of these investments is temporary.  In addition, we believe that the current lack of liquidity relating to ARS investments will have no impact on our ability to fund our ongoing operations and growth initiatives. 

We will continue to monitor the market for ARS and consider the impact, if any, on the fair value of our investments.  If current market conditions deteriorate further, or the anticipated recovery in market values does not occur, we may be required to record additional OTTI and/or temporary impairment.