Item 7A. Quantitative and Qualitative Disclosures about Market Risk Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We maintain a conservative investment policy, which focuses on the safety and preservation of our invested funds by limiting default risk, market risk, and reinvestment risk. The table below presents principal amounts and related weighted-average interest rates by year of maturity for our investment portfolio at June 26, 2005 and June 27, 2004: June 26, 2005 June 27, 2004 2006 2007 2008 2009 2010 THEREAFTER TOTAL FAIR VALUE TOTAL (in thousands) Cash equivalents Fixed rate ............... $378,183 $ — $ — $ — $ — $ — $378,183 $378,183 $ 57,739 Average rate ............... 3.05% — — — — — 3.05% — 1.20% Short-term investments Fixed rate ............. $167,979 $81,707 $44,250 $18,512 $13,724 $2,674 $328,846 $327,003 $263,009 Average rate ............... 3.60% 4.34% 4.42% 4.52% 4.33% 5.00% 3.99% — 2.47% Auction rate preferreds Variable rate ............. $ — $ — $ — $ — $ — $ — $ — $ — $ 4,998 Average rate ............... — — — — — — — — 1.29% Restricted cash Fixed rate ............. $ 85,038 $ — $ — $ — $ — $ — $ 85,038 $ 85,038 $112,468 Average rate ............... 3.00% — — — — — 3.00% — 1.00% Total investment securities . . $631,200 $81,707 $44,250 $18,512 $13,724 $2,674 $792,067 $790,224 $438,214 Average rate ............... 3.19% 4.34% 4.42% 4.52% 4.33% 5.00% 3.43% — 1.91% We mitigate default risk by investing in high credit quality securities and by constantly positioning our portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. The portfolio includes only marketable securities with active secondary or resale markets to achieve portfolio liquidity and maintain a prudent amount of diversification. We conduct business on a global basis in several major international currencies. As such, we are potentially exposed to adverse as well as beneficial movements in foreign currency exchange rates. The majority of our sales are denominated in U.S. dollars except for certain of our revenues in Japan that are denominated in Japanese Yen, and certain of our spares and service contracts which are denominated in other currencies. The majority of our expenses are denominated in U.S. dollars except for expenses related to our non U.S. sales and support offices which are denominated in these countries’ local currency. As a result, we believe that our primary exposure to foreign exchange rate fluctuation is naturally hedged (the revenue in local currency partially offsets the exposure to local currency expenses) except for our Japanese Yen revenue exposure in Japan. For this reason, we periodically hedge anticipated cash flow transactions with foreign currency forward contracts. We defer the gains and losses on these contracts and recognize them in income during the same period as the hedged transaction is recognized in income. We also enter into foreign currency forward contracts to hedge the gains and losses generated by the remeasurement of Japanese Yen-denominated receivable balances. The change in fair value of these contracts is recorded into earnings as a component of other income and offsets the change in fair value of the foreign currency denominated intercompany and trade receivables assuming the hedge contract fully covers the intercompany and trade receivable balances. On June 26, 2005, the notional amount of outstanding Japanese Yen forward contracts that are designated as balance sheet hedges was $32.6 million. The unrealized loss on the contracts on June 26, 2005, was $0.4 million. A 15% appreciation of the Japanese Yen would result in an unrealized loss of $5.8 million. Depreciation in the exchange rate of the Japanese Yen of approximately 15% would result in an unrealized gain of $4.2 million. On June 26, 2005, the notional amount of outstanding Japanese Yen forward contracts that are designated as cash flow hedges was $66.2 million. A 15% appreciation of the Japanese Yen would result in an unrealized loss of $11.7 million. Depreciation in the exchange rate of the Japanese Yen of approximately 15% would result in an unrealized gain of $8.6 million. 36

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