PART III Item 10.
Directors and Executive Officers of the Registrant.
Pursuant to Section 406 of the Sarbanes-Oxley Act of 2002, we have adopted a Code of Ethics for Senior Financial Officers that applies to our principal executive officer and principal financial officer, principal accounting officer and controller, and other persons performing similar functions.
Our Code of Ethics for Senior Financial Officers is publicly available on our website at www.
hologic.
com.
We intend to satisfy the disclosure requirement under Item 5.05 of Current Report on Form 8-K regarding an amendment to, or waiver from, a provision of this code by posting such information on our website, at the address specified above.
The additional information required by this item is incorporated by reference to our Definitive Proxy Statement for our annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.
Item 11.
Executive Compensation.
The information required by this item is incorporated by reference to our Definitive Proxy Statement for our annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
We maintain a number of equity compensation plans for employees, officers, directors and others whose efforts contribute to our success.
The table below sets forth certain information as our fiscal year ended September 24, 2005 regarding the shares of our common stock available for grant or granted under stock option plans that (i) were approved by our stockholders, and (ii) were not approved by our stockholders.
The number of securities and the exercise price of the outstanding securities have been adjusted to reflect our two-for-one stock split effected on November 30, 2005.
Equity Compensation Plan Information
## Table 0 ##
(1) Includes the following plans: 1986 Combination Stock Option Plan; Amended and Restated 1990 Non-employee Director Stock Option Plan; 1995 Combination Stock Option Plan; Amended and Restated 1999 Equity Incentive Plan; and 2000 Employee Stock Purchase Plan.
Also includes the following plans which we assumed in connection with our acquisition of Fluoroscan Imaging Systems in 1996: FluoroScan Imaging Systems, Inc.  1994 Amended and Restated Stock Incentive Plan and FluoroScan Imaging Systems, Inc.  1995 Stock Incentive Plan.
For a description of these plans, please refer to Footnote 5 contained in our consolidated financial statements.
Fixed Maturity Securities Available-for-Sale The following tables present our fixed maturity securities available-for-sale by industry category and the associated gross unrealized gains and losses, including other-than-temporary impairment losses reported in OCI, as of December 31, 2009 and 2008.
December 31,
## Table 1 ##
(1) Includes exposure to Alt-a mortgage loans with an amortized cost of $59.6 million, gross unrealized losses of $18.2 million, and a carrying amount of $41.4 million.
The Alt-a portfolio has a weighted average rating of BBB and 66% are 2005 and prior vintages.
(2) This exposure is all related to sub-prime mortgage loans.
(3) Includes exposure to sub-prime mortgage loans with an amortized cost of $27.4 million, gross unrealized gains of $0.3 million, gross unrealized losses of $17.9 million, and a carrying amount of $9.8 million.
Gross project expenses related to our Business Transformation Project, inclusive of pay-related expense, increased by $20.8 million in fiscal 2011 from fiscal 2010 and by $41.6 million in fiscal 2010 from fiscal 2009.
The increase in fiscal 2011 resulted from increased project spend including the initial stages of ramping up of our shared services center and a provision for severance resulting from the implementation of an involuntary severance plan.
The increase in fiscal 2010 resulted from only six months of activity being included in fiscal 2009, as the Business Transformation Project began in January 2009.
Provided the improvements needed in the underlying systems are obtained in the first half of fiscal 2012, we anticipate the software will be ready for its intended use in the second half of fiscal 2012, which will result in increased expense from both software amortization and deployment costs.
We will also incur increased costs from the ramp up of our shared services center, continuing costs for additional phases of our Business Transformation Project and information technology support costs.
We believe the increase in gross project expenses, including all pay-related expenses, related to the Business Transformation Project in fiscal 2012 as compared to fiscal 2011 will be approximately $175 million to $195 million.
We adjust the carrying values of our COLI policies to their cash surrender values on an ongoing basis.
The cash surrender values of these policies are largely based on the values of underlying investments, which through fiscal 2011 included publicly traded securities.
As a result, the cash surrender values of these policies fluctuated with changes in the market value of such securities.
The changes in the financial markets resulted in gains for these policies of $28.2 million in fiscal 2011, compared to gains for these policies of $21.6 million in fiscal 2010 and losses of $43.8 million in fiscal 2009.
Near the end of fiscal 2011, we reallocated all of our policies into low-risk, fixed-income securities and therefore we no longer expect significant volatility in operating income, net earnings and earnings per share in future periods related to these policies.
The provision for losses on receivables included within operating expenses decreased by $39.7 million in fiscal 2010 over fiscal 2009.
The decrease in our provision for losses on receivables in fiscal 2010 reflects fewer customer accounts exceeding our threshold for write-off in fiscal 2010 as compared to fiscal 2009.
Customer accounts written off, net of recoveries, were $37.8 million, or 0.10% of sales, $34.3 million, or 0.10% of sales, and $71.9 million, or 0.20% of sales, for fiscal 2011, 2010 and 2009, respectively.
Our provision for losses on receivables will fluctuate with general market conditions, as well as the circumstances of our customers.
Net Earnings Net earnings for fiscal 2011 decreased 2.4% over the comparable prior year period.
After adjusting for the estimated impact of the 53rd week in fiscal 2010, the decrease would have been 0.3%.
This adjusted decrease was primarily due to the factors discussed above and an increase in the effective tax rate.
The effective tax rate for fiscal 2011 was 36.96%, compared to an effective tax rate of 36.20% for fiscal 2010.
The difference between the tax rates for the two periods resulted largely from the one-time reversal of interest accruals for tax contingencies related to our settlement with the Internal Revenue Service (IRS) in the first quarter of fiscal 2010.
Net earnings increased 11.7% in fiscal 2010 from fiscal 2009.
After adjusting for the estimated impact of the 53rd week in fiscal 2010, the increase would have been 9.5%.
This adjusted increase was primarily due to a reduction in the effective income tax rate, as well as the factors discussed above.
The effective tax rate for fiscal 2010 was 36.20%, compared to an effective tax rate of 40.37% for fiscal 2009.
The difference between the tax rates for the two periods resulted largely from the one-time reversal of interest accruals for tax contingencies related to our settlement with the Internal Revenue Service (IRS) in the first quarter of fiscal 2010.
Set forth below is a reconciliation of actual net earnings to adjusted net earnings for the periods presented (see further discussion at “Impact of 53-week fiscal year in Fiscal 2010” above):
## Table 2 ##
The effective tax rate of 36.96% for fiscal 2011 was favorably impacted primarily by two items.
First, we recorded a tax benefit of approximately $17.0 million for the reversal of valuation allowances previously recorded on state net operating loss carryforwards.
Second, we adjust the carrying values of our COLI policies to their cash surrender values.
The gain of $28.2 million recorded in fiscal 2011 was primarily nontaxable for income tax purposes, and had the impact of decreasing income tax expense for the period by $11.1 million.
Partially offsetting these favorable impacts was the recording of $9.3 million in tax and interest related to various federal, foreign and state uncertain tax positions.
The effective tax rate of 36.20% for fiscal 2010 was favorably impacted primarily by two items.
First, we recorded an income tax benefit of approximately $29.0 million resulting from the one-time reversal of a previously accrued liability related to the settlement with the IRS (See “Liquidity and Capital Resources, Other Considerations, BSCC Cooperative Structure” for additional discussion).
Second, the gain of $21.6 million recorded to adjust the carrying value of COLI policies to their cash surrender values in fiscal 2010 was non-taxable for income tax purposes, and had the impact of decreasing income tax expense for the period by $8.3 million.
The effective tax rate of 40.37% for fiscal 2009 was unfavorably impacted primarily by two factors.
First, we recorded tax adjustments related to federal and state uncertain tax positions of $31.0 million.
Second, the loss of $43.8 million recorded to adjust the carrying value of COLI policies to their cash surrender values in fiscal 2009 was non-deductible for income tax purposes, and had the impact of increasing income tax expense for

<table><tr><td>Plan Category</td><td>Number Of Securities To Be Issued Upon ExerciseOf Outstanding Options, Warrants And Rights (a)</td><td>Weighted-Average Exercise Price Of Outstanding Options, Warrants And Rights (b)</td><td>Number Of Securities Remaining Available For Future Issuance Under EquityCompensation Plans (excluding securities reflected in column (a)) (c)</td></tr><tr><td>Equity compensation plans approved by security holders -1</td><td>3,841,008</td><td>$7.84</td><td>1,016,520</td></tr><tr><td>Equity compensation plans not approved by security holders -2</td><td>863,604</td><td>$6.44</td><td>0</td></tr><tr><td>Total</td><td>4,704,612</td><td>$7.58</td><td>1,016,520</td></tr></table>
<table><tr><td> </td><td colspan="4"> December 31, 2009</td></tr><tr><td> </td><td> Amortized cost</td><td> Gross unrealized gains</td><td> Gross unrealized losses</td><td> Carrying amount</td></tr><tr><td> </td><td colspan="4"><i>(in millions)</i> </td></tr><tr><td>Finance — Banking</td><td>$4,288.5</td><td>$68.2</td><td>$480.4</td><td>$3,876.3</td></tr><tr><td>Finance — Brokerage</td><td>428.6</td><td>11.0</td><td>6.4</td><td>433.2</td></tr><tr><td>Finance — Finance Companies</td><td>265.2</td><td>9.0</td><td>18.7</td><td>255.5</td></tr><tr><td>Finance — Financial Other</td><td>535.6</td><td>26.0</td><td>8.6</td><td>553.0</td></tr><tr><td>Finance — Insurance</td><td>2,714.9</td><td>36.5</td><td>207.9</td><td>2,543.5</td></tr><tr><td>Finance — REITS</td><td>1,327.1</td><td>14.6</td><td>80.0</td><td>1,261.7</td></tr><tr><td>Industrial — Basic Industry</td><td>1,921.4</td><td>74.9</td><td>19.1</td><td>1,977.2</td></tr><tr><td>Industrial — Capital Goods</td><td>2,364.0</td><td>99.1</td><td>33.0</td><td>2,430.1</td></tr><tr><td>Industrial — Communications</td><td>2,761.6</td><td>174.3</td><td>21.8</td><td>2,914.1</td></tr><tr><td>Industrial — Consumer Cyclical</td><td>1,597.0</td><td>69.4</td><td>32.0</td><td>1,634.4</td></tr><tr><td>Industrial — Consumer Non-Cyclical</td><td>3,149.6</td><td>172.0</td><td>27.4</td><td>3,294.2</td></tr><tr><td>Industrial — Energy</td><td>1,933.3</td><td>108.3</td><td>19.2</td><td>2,022.4</td></tr><tr><td>Industrial — Other</td><td>700.0</td><td>22.8</td><td>20.0</td><td>702.8</td></tr><tr><td>Industrial — Technology</td><td>765.0</td><td>31.6</td><td>11.2</td><td>785.4</td></tr><tr><td>Industrial — Transportation</td><td>934.9</td><td>41.7</td><td>18.4</td><td>958.2</td></tr><tr><td>Utility — Electric</td><td>2,518.6</td><td>115.6</td><td>18.6</td><td>2,615.6</td></tr><tr><td>Utility — Natural Gas</td><td>1,086.2</td><td>66.0</td><td>7.4</td><td>1,144.8</td></tr><tr><td>Utility — Other</td><td>122.8</td><td>3.2</td><td>0.6</td><td>125.4</td></tr><tr><td>FDIC guaranteed</td><td>96.1</td><td>1.4</td><td>—</td><td>97.5</td></tr><tr><td>Government guaranteed</td><td>1,102.8</td><td>76.3</td><td>16.9</td><td>1,162.2</td></tr><tr><td>Total corporate securities</td><td>30,613.2</td><td>1,221.9</td><td>1,047.6</td><td>30,787.5</td></tr><tr><td>Residential pass-through securities</td><td>3,019.1</td><td>86.0</td><td>3.8</td><td>3,101.3</td></tr><tr><td>Commercial mortgage-backed securities</td><td>4,898.0</td><td>20.9</td><td>1,319.2</td><td>3,599.7</td></tr><tr><td>Residential collateralized mortgage obligations -1</td><td>1,198.9</td><td>13.5</td><td>114.9</td><td>1,097.5</td></tr><tr><td>Asset-backed securities — Home equity -2</td><td>487.1</td><td>—</td><td>173.1</td><td>314.0</td></tr><tr><td>Asset-backed securities — All other</td><td>1,308.1</td><td>21.1</td><td>15.5</td><td>1,313.7</td></tr><tr><td>Collateralized debt obligations — Credit</td><td>197.2</td><td>1.5</td><td>67.0</td><td>131.7</td></tr><tr><td>Collateralized debt obligations — CMBS</td><td>257.0</td><td>—</td><td>129.4</td><td>127.6</td></tr><tr><td>Collateralized debt obligations — Loans</td><td>101.4</td><td>—</td><td>21.4</td><td>80.0</td></tr><tr><td>Collateralized debt obligations — ABS -3</td><td>51.9</td><td>0.3</td><td>21.9</td><td>30.3</td></tr><tr><td>Total mortgage-backed and other asset-backed securities</td><td>11,518.7</td><td>143.3</td><td>1,866.2</td><td>9,795.8</td></tr><tr><td>U.S. Government and agencies</td><td>550.1</td><td>9.1</td><td>0.5</td><td>558.7</td></tr><tr><td>States and political subdivisions</td><td>2,008.7</td><td>53.4</td><td>13.5</td><td>2,048.6</td></tr><tr><td>Non-U.S. governments</td><td>421.1</td><td>42.4</td><td>1.1</td><td>462.4</td></tr><tr><td>Total fixed maturity securities, available-for-sale</td><td>$45,111.8</td><td>$1,470.1</td><td>$2,928.9</td><td>$43,653.0</td></tr></table>
<table><tr><td></td><td>2011</td><td>2010 (53 Weeks)</td><td> 2009</td></tr><tr><td></td><td colspan="3"> (In thousands)</td></tr><tr><td>Net earnings for the 53/52 week periods</td><td>$1,152,030</td><td>$1,179,983</td><td>$1,055,948</td></tr><tr><td>Estimated net earnings for the additional week in fiscal 2010</td><td>—</td><td>24,127</td><td>—</td></tr><tr><td>Adjusted net earnings</td><td>$1,152,030</td><td>$1,155,856</td><td>$1,055,948</td></tr><tr><td>Actual percentage (decrease) increase</td><td>-2.4%</td><td>11.7%</td><td></td></tr><tr><td>Adjusted percentage (decrease) increase</td><td>-0.3%</td><td>9.5%</td><td></td></tr></table>

Question: In what sections is Finance — Finance Companies positive?
Answer: Amortized cost Gross unrealized gains Gross unrealized losses Carrying amount