Gross profit as a percentage of net sales was 52.4 percent for the first nine months of 2010, compared with 53.6 percent for the same period last year.Operating expenses for the nine-months ended September 30, 2010 increased to $247.8 million from $205.6 million in the same period last year. Operating income for the first nine months of 2010 increased 6.6 percent to $268.0 million from $251.5 million in the corresponding period in 2009. Net income for the first nine months of 2010 was $162.9 million, or $1.75 per diluted share, compared with $155.4 million, or $1.63 per diluted share, for the same period last year. Auction Rate Securities In March 2010, the Company entered into an agreement relating to $54.2 million in par value auction rate securities, which enables the Company to sell such securities (the "Put Option") in semi-annual or annual installments beginning March 22, 2011 with full sale rights available on or after March 22, 2013. Such auction rate securities, which have been reclassified from available-for-sale to trading securities, will continue to accrue interest until redeemed through either the Put Option, by the auction process, or by the terms outlined in their respective prospectuses in the event of auction failure. At September 30, 2010 the Company held auction rate securities with a face value of $81.5 million ($87.3 million at June 30, 2010 and $92.7 million at March 31, 2010) and the Put Option with a fair market value of $3.8 million ($4.1 million at June 30, 2010 and $5.1 million at March 31, 2010). The Company determined that an impairment related to its auction rate securities of $7.2 million existed at September 30, 2010, of which $2.2 million was deemed temporary and $5.0 million was deemed other-than-temporary. As a result, a loss of $1.2 million, net of taxes, is included as a component of accumulated other comprehensive loss as of September 30, 2010, and the Company recorded a net non-cash charge to earnings of $0.7 million in respect of our auction rate securities and Put Option for the third quarter of 2010. The auction rate securities will continue to accrue interest at their contractual rates until their respective auctions succeed or they are redeemed.