We continue to evaluate our logistics processes and implement new strategies to further reduce our transportation costs and improve lead-times to customers. Currently, we have distribution centers located in the following locations:

Tijuana, Mexico, which provides logistics services for products destined for customers in the U.S., Canada, Asia Pacific, and Latin America regions;

Prague, Czech Republic, which provides logistics services for products shipped to customers in our Europe, Middle East and Africa regions;

~~Table of Contents~~Suzhou, China, which provides logistics services for products which are shipped within Mainland China;

Melbourne, Australia, which provides logistics services for products which are shipped to the retail channel in Australia and New Zealand;

Sao Paulo, Brazil, which provides logistics services for products which are shipped to customers within Brazil; and

Tokyo, Japan, which provides logistics services for products which are shipped to customers within Japan.

With respect to the above locations, we use third party warehouses in the Czech Republic, Australia, Brazil, and Japan. We operate all other warehouse facilities.

BACKLOG

Our backlog of unfilled orders was $29.6 million at March 31, 2011 compared to $31.4 million at March 31, 2010 ~~compared to $23.7 million at March 31, 2009.~~. We include all purchase orders scheduled for delivery over the next 12 months in backlog. We have a “book and ship” business model whereby we fulfill the majority of our orders within 48 hours of our receipt of the order. Our backlog is occasionally subject to cancellation or rescheduling by the customer on short notice with little or no penalty. Because of our “book and ship” model, as well as the uncertainty of order cancellations or rescheduling, we do not believe our backlog as of any particular date is indicative of actual sales for any future period and, therefore, should not be used as a measure of future revenue.

MANUFACTURING AND SOURCES OF MATERIALS

Manufacturing operations consist primarily of assembly and testing which is performed in our manufacturing facilities in Tijuana, Mexico, and we maintain a small assembly operation in California primarily for custom products. In March 2009, we entered into an agreement with GoerTek, Inc., an existing third party contract manufacturer, to outsource the manufacturing of our Bluetooth products in China which resulted in the discontinuance of manufacturing of our Bluetooth products at the Suzhou, China facility in fiscal ~~2010. We also closed a small assembly operation in the United Kingdom in fiscal 2009.~~2010. In addition, we outsource the manufacturing of a limited number of our other products to ~~th ird~~third parties, typically in China and other countries in Asia. See further discussion on our business risks associated with our manufacturers under the risk titled “We depend on original design manufacturers and contract manufacturers who may not have adequate capacity to fulfill our needs or may not meet our quality and delivery objectives which could have an adverse effect on our business” within Item 1A Risk Factors of this 10-K.

We purchase the components for our products, including proprietary semi-custom integrated circuits, amplifier boards and other electrical components, primarily from suppliers in Asia, Mexico, the U.S., and Europe. The majority of our components and sub-assemblies used in our manufacturing operations are obtained, or are reasonably available, from dual-source suppliers, although we do have a certain number of sole-source suppliers. The earthquake, tsunami and nuclear issues arising in Japan in March 2011 have not materially interfered with our supply chain; however, we cannot predict what impact, if any, these events may have in the future.

~~As a result~~

Table of our restructuring activities initiated in fiscal 2009 in China, Mexico, and, to a lesser extent, the United Kingdom, we have been able to reduce manufacturing costs as well as costs associated with procurement activities.Contents

We procure materials to meet forecasted customer requirements. Special products and certain large orders are quoted for delivery after receipt of orders at specific lead times. We maintain minimum levels of finished goods based on market demand in addition to inventories of raw materials, work in process, and sub-assemblies and components. In addition, certain vendors maintain inventories on consignment which primarily consist of raw materials and components. We write-down inventory items determined to be either excess or obsolete to the lower of cost or market value.

ENVIRONMENTAL MATTERS

We ~~have complied~~are required to comply and are currently in compliance with the European Union and other Directives on the Restrictions of the use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) and on Waste Electrical and Electronic Equipment requirements. Additionally, we are compliant with the RoHS initiatives in China and Korea.

We are subject to various federal, state, local, and foreign environmental laws and regulations, including those governing the use, discharge, and disposal of hazardous substances in the ordinary course of our manufacturing process. We believe that our current manufacturing and other operations comply in all material respects with applicable environmental laws and regulations; however, it is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted to create environmental liability with respect to our facilities, operations, or products.

We continue our efforts toward environmental and social responsibility. In Spring 2011, our solar panel installation project will be completed, and it will be the largest solar installation in Santa Cruz County. Upwards of 80% of our Santa Cruz corporate site utility costs are expected to be offset by our solar installation.

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INTELLECTUAL PROPERTY

We maintain a program of seeking patent protection for our technologies when we believe it is commercially appropriate. As of March 31, ~~2010,~~2011, we had ~~497~~534 worldwide patents in force, expiring between ~~2010~~2011 and ~~2034.~~2035.

Our success will depend in part on our ability to obtain patents and preserve other intellectual property rights covering the design and operation of our products. We intend to continue to seek patents on our inventions when commercially appropriate. The process of seeking patent protection can be lengthy and expensive, and there can be no assurance that patents will be issued for currently pending or future applications or that our existing patents or any new patents issued will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to us. We may be subject to, or may initiate, litigation or patent office interference proceedings, which may require significant financial and management resources. The failure to obtain necessary licenses or other rights or the advent of litigation arising out of any such intellectual property claims could have a material adverse effect on our operations.

We own trademark registrations in the U.S. and a number of other countries with respect to the Plantronics and Clarity trademarks as well as the names of many of our products and product features. We currently have U.S. and foreign trademark applications pending in connection with certain new products and product features. We also attempt to protect our trade secrets and other proprietary information through comprehensive security measures, including agreements with customers and suppliers, and proprietary information agreements with employees and consultants. We may seek copyright protection where we believe it is applicable. We own a number of domain name registrations and intend to seek more as appropriate. There can be no assurance that our existing or future copyright ~~registra tions,~~registrations, trademarks, trade secrets, or domain names will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to us.

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EMPLOYEES

On March 31, ~~2010,~~2011, we employed approximately 3,200 people worldwide, including approximately 2,200 employees at our manufacturing facility in Tijuana, Mexico. To our knowledge, no employees are currently covered by collective bargaining agreements.

EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below is certain information regarding the executive ~~officers~~team of Plantronics and their ages as of March 31, ~~2010.~~2011.



NAME	AGE	POSITION
Ken Kannappan*	5051	President and Chief Executive Officer
Don Houston*	5556	Senior Vice President, Sales
Barry Margerum	5859	Chief Strategy Officer
Renee Niemi*	4546	Senior Vice President, Communication Solutions
Mike Perkins	5152	Vice President, Product Development & Technology
Barbara Scherer*	5455	Senior Vice President, Finance & Administration and Chief Financial Officer
Carsten Trads	5455	President, Clarity
~~Philip Vanhoutte~~Ingrid Van Den Hoogen	5448	Chief Marketing Officer
Philip Vanhoutte *	55	Managing Director, Europe, Middle East & Africa
Patricia Wadors	46	Senior Vice President, Human Resources
Larry Wuerz	5253	Senior Vice President, Worldwide Operations

* Executive is also considered an Executive Officer as defined under Regulation S-K Item 401(b).

Mr. Kannappan joined Plantronics in 1995 as Vice President of Sales and was promoted to various positions prior to being named President and Chief Operating Officer in March 1998. In 1999, he was promoted to Chief Executive Officer and appointed to the Board of Directors. Prior to joining Plantronics, Mr. Kannappan was Senior Vice President of Investment Banking for Kidder, Peabody & Co. Incorporated, where he was employed from 1985 to 1995. Mr. Kannappan has a Bachelor of Arts degree in Economics from Yale University and a Master of Business Administration from Stanford University. Mr. Kannappan also serves as Chairman of the Board of Directors at Mattson Technology, Inc., a supplier of advanced process equipment for the semiconductor industry.

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Mr. Houston joined Plantronics in 1996 as Vice President of Sales and was promoted to Senior Vice President of Sales in 1998. From 1995 through 1996, Mr. Houston served as Vice President of Worldwide Sales for Proxima Corporation, a designer, developer, manufacturer, and marketer of multi-media projection products. From 1985 to 1995, Mr. Houston held a number of positions at Calcomp, Inc., which is engaged in the business of manufacturing computer peripherals for the CAD and graphic market, including Regional Sales Manager and Vice President of Sales, Service and Marketing. Prior to 1985, Mr. Houston held various sales and marketing management positions with IBM Corporation. Mr. Houston graduated from the University of Arizona with a Bachelor of Science degree in Business/Marketing.

Mr. Margerum joined Plantronics in 1994 as Vice President of Marketing and was promoted in 1996 to President and General Manager of the Computer and Mobile Systems Group. In 1997, he left Plantronics to become President and CEO of Euphonix, Inc., a public company in the high-end audio equipment space. In 2000, he re-joined Plantronics and, in 2004, became Vice President of Strategy and Business Development and, in 2008, he was named Chief Strategy Officer. In October 2009, Mr. Margerum was also named the acting Chief Marketing Officer on an interim basis. Prior to joining Plantronics, from 1989 to 1994, Mr. Margerum was CEO of Mitem Corporation, a middleware software company. From 1980 to 1989, he held a variety of marketing and sales positions including Vice President of Marketing for GRiD Systems Corporation, a laptop computer manufacturer. Mr. Margerum also worked for Apple, Inc. and IBM Corporation. Mr. Margerum holds a Bachelor of Science in Engineering from Princeton University and a Master of Business Administration from Stanford University. Mr. Margerum also serves on the Board of Directors of Mitem Corporation.

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Ms. Niemi joined Plantronics in 2005 as Vice President and General Manager, Mobile and Entertainment with nearly 20 years experience in the mobile computing and communications industries. In 2009, she was promoted to Senior Vice President, Communications Solutions. Prior to joining Plantronics, Ms. Niemi held senior positions with companies such as Visto Corporation, Mobilesys, Inc., Xircom, and NEC Technologies and was most recently at Danger, Inc. Ms. Niemi graduated from Santa Clara University with a Bachelor of Science degree in Electrical Engineering. She also earned a certificate in General Management for High Technology from Stanford University’s IEEE Joint Program.

Mr. Perkins joined Plantronics in 2008 as Vice President, Product Development and Technology. Prior to joining Plantronics, he held various positions during his 25 years at Hewlett-Packard Company (“HP”) including Vice President/General Manager of HP’s Voodoo Business Unit and several Research and Development Vice President roles in HP’s locations in California and Grenoble, France. He was also Senior Vice President Research and Development at LeapFrog Enterprises from 2002 to 2005. Mr. Perkins holds Bachelor of Science degrees in Applied Mechanics and in Biomedical Engineering from the University of California at San Diego.

Ms. Scherer joined Plantronics in 1997 as Vice President of Finance & Administration and Chief Financial Officer. In 1998, Ms. Scherer was promoted to Senior Vice President of Finance & Administration and Chief Financial Officer. Prior to joining Plantronics, Ms. Scherer held various executive management positions in the data storage industry principally with Micropolis Corporation, did strategic planning with the Boston Consulting Group, and was a member of the corporate finance team at ARCO. In September 2004, Ms. Scherer joined the Board of Directors of Keithley Instruments, a test and measurement company, on which she served until the company was acquired in December 2010. Ms. Scherer has Bachelor degrees in Economics and in Environmental Studies from the University of California, Santa Barbara and received a Master of Business Administration from the Yale School of Organization and Management. ~~Ms. Scherer is also a Director of Keithley Instruments Inc, a supplier of measurement and testing devices.~~

Mr. Trads joined Clarity (formerly Walker-Ameriphone) in 2003 as President. From 1994 until joining Plantronics, Mr. Trads held various positions within GN ReSound, a manufacturer of hearing aids and audiological measurement equipment. From 1998 to 2003, Mr. Trads served as President of GN ReSounds’ North American operation and, from 1994 until 1998, he served as a Senior Vice President at its headquarters in Copenhagen, Denmark, where he was a member of the executive management committee and the global management group and also led the sales and marketing organization. From 1991 to 1994, Mr. Trads was Vice President of Sales and Marketing for Dancall Radio A/S, a manufacturer of cell phones and cordless phones. From 1985 to 1991, he held management positions in the distribution and ~~mar keting~~marketing divisions of Bang and Olufsen Group, a global manufacturer of consumer electronics. Mr. Trads holds a degree in Business Administration and Management from the Copenhagen Business School in Denmark.

Ms. Van Den Hoogen joined Plantronics in 2010 as Chief Marketing Officer. Prior to joining Plantronics, Ms. Van Den Hoogen was the Senior Vice President of Corporate Marketing at Sun Microsystems, Inc. ("Sun") where she led the global brand, advertising, communications, and marketing teams. With more than 20 years of marketing experience at Sun, Ms. Van Den Hoogen led branding for Sun and Java, drove eco-responsibility and open source marketing initiatives, and various product and strategic marketing roles throughout her tenure. Prior to joining Sun, Ms. Van Den Hoogen held roles in software development at Megatek, United Technologies and GTE Government Systems. She holds a Bachelor of Arts degree in Math and Computer Science from San Jose State University. Ms. Van Den Hoogen is also Vice President of the Board of Directors of Alaska Dance Theater, a non-profit organization.

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Mr. Vanhoutte joined Plantronics in 2003 as Managing Director of Europe, Middle East, and Africa (“EMEA”). From 2001 until 2003, he served as Corporate Vice President of Marketing at Sony Ericsson Mobile Communications. From 2000 to 2001, Mr. Vanhoutte served as Vice President of Strategic Market Development at Ericsson’s Personal Communications Division. From 1998 until 2000, he served as Senior Vice President of Products, Marketing and Sales at MCI WorldCom’s International Division in London. From 1994 until 1998, Mr. Vanhoutte held various marketing and general management positions at Dell Computer Corporation including, General Manager for the Business Systems Division in the U.S., Managing Director for Dell Direct in the United Kingdom and Ireland, and Vice ~~Presid ent~~President of Products, Marketing & Services for EMEA. Beginning in 1991, he worked for Nokia Data as Vice President of Marketing, which was merged into Fujitsu-ICL Systems Inc. where he continued as Vice President of Marketing, Personal Systems and Client-Server Division until 1994. From 1985 until 1991, Mr. Vanhoutte worked in various European marketing and division manager roles with Wang Laboratories. He started his career at Arthur Andersen’s Benelux Information Consulting Division in 1977 where he specialized in structured programming and office automation. Mr. Vanhoutte studied Applied Economics and Engineering at the University of Leuven, Belgium.

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Ms. Wadors joined Plantronics in 2010 as Senior Vice President of Human Resources. Prior to joining Plantronics, she held various human resource management positions with such companies as Yahoo! Inc., where she was the Senior Vice President of Human Resources, Align Technology, Inc., Applied Materials, Inc., Merck & Co., Inc. and Viacom, Inc. Currently Ms. Wadors is on the Development Committee of Second Harvest Food Bank of Santa Cruz County. Ms. Wadors graduated from Ramapo College with a Bachelor of Science degree in Business Management with a focus in Human Resource Management.

Mr. Wuerz joined Plantronics in 2007 as Senior Vice President of Worldwide Operations. Prior to Plantronics, Mr. Wuerz spent 28 years at HP where he held several senior positions. Most recently, Mr. Wuerz was the Worldwide Vice President of Operations and Supply Chain for the Desktop Personal Computer organization, including consumer, commercial and workstation PCs. Prior to this role, Mr. Wuerz held the same title for HP’s Consumer Desktop Personal Computer organization. In addition to Mr. Wuerz’s operations roles at HP, he also held senior positions in other functional areas, including Research and Development and Human Resources. Mr. Wuerz holds a Bachelor of Science degree in Electrical Engineering from the University of Missouri – Rolla and a Master of Science in Electrical ~~En gineering~~Engineering degree from Stanford University.

Executive officers serve at the discretion of the Board of Directors. There are no family relationships between any of the directors and executive officers of Plantronics.

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ITEM 1A. RISK FACTORS

Investors in our stock should carefully consider the following risk factors in connection with any investment in our stock. Our stock price will reflect the performance of our business relative to, among other things, our competition, expectations of securities analysts or investors, and general economic market conditions and industry conditions. Our business, financial condition and results of operations could be materially adversely affected if any of the following risks occur. Accordingly, the trading price of our stock could decline, and investors could lose all or part of their investment.

Our operating results are difficult to predict, and fluctuations may cause volatility in the trading price of our common stock.

Given the nature of the markets in which we compete, our revenues and profitability are difficult to predict for many reasons, including the following:

Our operating results are highly dependent on the volume and timing of orders received during the quarter, which are difficult to forecast. Customers generally order on an as-needed basis, and we typically do not obtain firm, long-term purchase commitments from our customers. As a result, our revenues in any quarter depend primarily on orders booked and shipped in that quarter.

We incur a large portion of our costs in advance of sales orders because we must plan research and production, order components and enter into development, incur sales and marketing expenditures, and other operating commitments prior to obtaining firm commitments from our customers. In the event we acquire too much inventory for certain products, the risk of future inventory write-downs increases. Conversely, in the event we have inadequate inventory to meet the demand for particular products, we may miss significant revenue opportunities or incur significant expenses such as air freight, costs for expediting shipments, and other negative variances in our manufacturing processes as we attempt to make up for the shortfall. When a significant portion of our revenue is derived from new products, forecasting the appropriate volumes of production is even more difficult.

Fluctuations in our operating results may cause volatility in the trading price of our common stock.

Economic conditions ~~could continue to~~may materially adversely affect the Company.

Our results of operations and financial performance depend significantly on continued improvement in worldwide economic conditions. Uncertainty ~~about current~~regarding the global economic ~~conditions poses a risk as consumers and businesses have postponed~~recovery continues to pose risks to our business. Reductions in spending in response to tighter credit, negative financial news and/or declines in income or asset values, ~~which~~and strength or weakness of the economies of sovereign nations around the world may have ~~had~~ a material negative effect on demand for our products. Other factors that influence demand include job loss and creation, volatility in fuel and other energy costs, conditions in the residential real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence, and other macroeconomic factors affecting consumer spending behavior. These and other economic factors have had a material adverse effect on demand for our products and on our financial condition and ~~o perating~~operating results and may continue to have such an effect in the ~~future.~~future if economic conditions do not improve.

~~As a result~~Our profitability is very sensitive to the level of revenues and, in particular, to revenues from our highest margin products, which have historically been corded OCC products for contact center applications. Demand for our products is cyclical with respect to economic cycles, and our OCC business in total contracted when the U.S. recession and global economic slowdown manifested itself in late calendar 2008. During each of the ~~worldwide economic conditions described above,~~quarters of fiscal 2011, we experienced revenue growth over the same respective quarters in ~~all portions~~fiscal 2010, and our revenues in the fourth quarter of ~~our business declined~~fiscal 2011 are near pre-recessionary levels. Although we have experienced revenue growth from the decline in the fourth quarter of fiscal 2009, and in most portions of our business in the first and second quarters of fiscal 2010 in comparison to the comparable periods in the prior years. In the third and fourth quarters of fiscal 2010, net revenues grew by 9% and 27%, respectively, compared to the same periods in the prior year; however, revenues are still lower than fiscal 2008 levels for these periods and there is no assurance that the economy will fully recover or that there will not be another economic slowdown or downturn. If worldwide economic conditions do not improve or if they weaken below current levels, our forecasted demand may not materialize to the levels we require to achieve our anticipated financial results, which, in turn, ~~cou ld~~could have a material adverse effect on our revenue, profitability and the market price of our stock. Failure to meet our anticipated demand projections could create excess levels of inventory, which would result in additional reserves for excess and obsolete inventory, negatively impacting our financial results.

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~~A significant portion of our profits comes from~~Uncertainty regarding future economic conditions also makes it more challenging for us to forecast operating results, make business decisions, and identify the ~~office and contact center markets. We experienced a meaningful decline in demand in these markets and a further decline could materially adversely~~risks that may affect our ~~results. The economic conditions described above have resulted in a severe contraction~~business, sources and uses of business spending which resulted in a drop in revenues of all our OCC products in fiscal 2009 and fiscal 2010 in comparison to fiscal 2008. In addition, the economic conditions have also resulted in a reduction in the establishment of new contact centers and in capital investments to expand or upgrade existing centers which has negatively affected our business. We are not able to predict when economic conditions will improve or when an increase in the establishment of new contact centers or an incr ease in capital investments in contact centers may occur. Because of our reliance on the contact center market, we have been more affected by changes in the rate of contact center establishment and expansion and the communications products used by contact center agents than would a company serving a broader market. Any further decrease in the demand for contact centers and related headset products will cause a further decrease in the demand for our products which will materially adversely affect our business,cash, financial condition and results of operations.

Further, fluctuations in foreign currency exchange rates impact our revenues and profitability because we report our financial statements in U.S. Dollars, whereas a significant portion of our sales to customers are transacted in other currencies, particularly the Euro and the Great Britain Pound (“GBP”). We hedge a portion of our Euro and GBP forecasted revenue exposure for the future 12 month period. Although we have employed these hedging techniques to minimize these risks, we can offer no assurance that such strategies will be effective. ~~Over the past three-month period, the value of the Euro and the GBP against the U.S. Dollar has declined by approximately 10% and 6%, respectively.~~ If the Euro and GBP ~~continue to~~ fall against the U.S. Dollar, ~~or if the current exchange rates co ntinue,~~ our revenues, gross profit and profitability in the future could be negatively affected.

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See also our risk titled “We are exposed to fluctuations in foreign currency exchange rates which may adversely affect our revenues, gross profit, and profitability.”

Failure to meet our anticipated demand projections could create excess levels of inventory, which would result in additional reserves for excess and obsolete inventory, negatively impacting our financial results.

~~Our operating results are difficult to predict, and fluctuations may cause volatility in the trading price of our common stock.~~

~~Given the nature of the markets in which we compete, our revenues and profitability are difficult to predict for many reasons, including the following:~~

We incur a large portion of our costs in advance of sales orders because we must plan research and production, order components and enter into development, incur sales and marketing expenditures, and other operating commitments prior to obtaining firm commitments from our customers. In the event we acquire too much inventory for certain products, the risk of future inventory write-downs increases. In the event we have inadequate inventory to meet the demand for particular products, we may miss significant revenue opportunities or incur significant expenses such as air freight, costs for expediting shipments, and other negative variances in our manufacturing processes as we attempt to make up for the shortfall. When a significant portion of our revenue is derived from new products, forecasting the appropriate volumes of production is even more difficult.

~~Fluctuations in our operating results may cause volatility in the trading price of our common stock.~~

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The success of our business depends heavily on our ability to effectively market our UC products, and our business could be materially adversely affected if markets do not develop as we expect.

We compete in the business market for the sale of our office and contact center products. We believe that our greatest long-term opportunity for profit growth is in the UC office market, and our foremost strategic objective for this segment is to increase headset adoption. To this end, we are investing in creating new products that are more appealing in functionality and design as well as targeting certain vertical segments to increase sales. We continue to believe that the implementation of UC technologies by large corporations will be a significant long-term driver of office headset adoption, and, as a result, a key long-term driver of revenue and product growth. UC is the integration of voice and video-based communications systems enhanced with software applications and IPInternet Protocol (“IP”) networks. ~~ 0;~~It may include the integration of devices and media associated with a variety of business workflows and applications, including e-mail, instant messaging, presence, audio, video and web conferencing, and unified messaging. UC seeks to provide seamless connectivity and user experience for enterprise workers regardless of their location and environment, improving ~~the~~ overall business efficiency and providing more effective collaboration among an increasingly distributed workforce. Despite weak economic conditions, trial deployments of UC solutions and headsets continue to grow, with some evidence that the cost savings and productivity enhancements derived from UC are driving the expansion of existing deployments in both the U.S. and Europe. We can give no assurance that significant growth in UC will ~~occur; however, we believe~~occur or that we ~~are well positioned in the UC market.~~will be able to take advantage of any growth that does occur.

Our ability to realize our UC plans and to achieve the financial results projected to arise from UC adoption could be adversely affected by the following factors: (i) the risk that, as UC becomes more widely adopted, competitors will offer solutions that will effectively commoditize our headsets which, in turn, will reduce the sales prices for our headsets; (ii) our plans are dependent upon ~~adoption~~the market success of ~~our UC solution by~~ major platform providers such as ~~Avaya, Inc.,~~Microsoft Corporation, Cisco Systems, Inc., ~~IBM,~~Avaya, Inc., Alcatel-Lucent, and ~~Microsoft Corporation,~~IBM, and we have a limited ability to influence such providers with respect to the functionality of their platforms, their rate of deployment, and their willingness to integrate their platforms with our solutions; (iii) the development of UC solutions is technically complex and this may delay or obstruct our ability to ~~introdu ce~~introduce solutions to the market on a timely basis and that are cost effective, ~~feature rich,~~feature-rich, stable and attractive to our customers; (iv) our development of UC solutions is dependent on our ability to design, develop and manufacture complex electronic systems comprised of hardware, firmware and software that must work in a wide variety of environments and multiple variations; (v) as UC becomes more widely adopted we anticipate that competition for market share will increase, and some competitors may have superior technical and economic resources; (vi) UC solutions may not be adopted with the breadth and speed in the marketplace that we currently anticipate; and (vii) UC may evolve rapidly and unpredictably and our ability to adapt to those changes and future requirements may impact our profitability in this market and our overall margins.

Because the major providers of UC ~~systems~~software utilize complex and proprietary platforms in which our UC ~~solutions~~products will be integrated, it will be necessary for us to expand our technical support capabilities. This expansion will result in additional expenses to hire the personnel and develop the infrastructure necessary to adequately serve our UC customers. Our support expenditures may substantially increase over time as these platforms evolve and as UC becomes more commonly adopted.

If these investments do not generate incremental revenue, our business could be materially affected. In addition, the UC market is intensively competitive; failure to adapt to pricing pressures could impact our business.

The failure of our suppliers to provide quality components or services in a timely manner could adversely affect our results of operations.

Our growth and ability to meet customer demand depends in part on our ability to obtain timely deliveries of raw materials, components, sub-assemblies, and products from our suppliers. We buy raw materials, components and sub-assemblies from a variety of suppliers and assemble them into finished products. We also have certain of our components and products manufactured for us by third party suppliers. The cost, quality, and availability of such goods are ~~also experiencing a more aggressive~~essential to the successful production and ~~competitive environment with respect~~sale of our products. Obtaining raw materials, components, sub-assemblies, and finished products entails various risks, including the following:

Rapid increases in production levels to ~~price in~~meet unanticipated demand for our ~~business markets, leading to increased order volatility which puts pressure on profitability and~~products could result in higher costs for components and sub-assemblies, increased expenditures for freight to expedite delivery of required materials, and higher overtime costs and other expenses. These higher expenditures could reduce our profit margins. Further, if production is increased rapidly, there may be decreased manufacturing yields, which may also reduce our margins.

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We obtain certain raw materials, sub-assemblies, components and products from single suppliers, including substantially all of our Bluetooth products from GoerTek, Inc. Alternate sources for these items may not be readily available. Any failure of GoerTek, Inc. or our other suppliers to remain in business, to provide us with the quantity of components or products that we need or to purchase the raw materials, subcomponents and parts required by them to produce and provide to us the components or products we need could materially adversely affect our business, financial condition and results of operations.

Although we generally use standard raw materials, parts and components for our products, the high development costs associated with emerging wireless and other technologies may require us to work with only a ~~loss~~single source of silicon chips, chip-sets or other components or materials (“components or materials”) on any particular new product. We, or our supplier(s) of components or materials, may experience challenges in designing, developing and manufacturing components or materials using these new technologies which could affect our ability to meet market ~~share~~schedules. Our components or materials suppliers may decide for commercial reasons to discontinue components or materials that we have designed into our products. Due to our dependence on single suppliers for certain components or materials, we could experience higher prices, a delay in development of the components or materials, or the inability to meet our customer demand for these new products. Additionally, these suppliers or other suppliers may enter into bankruptcy, discontinue production of the components or materials we depend on, or may not be able to produce for their own commercial reasons due to financial difficulties or global economic conditions. If this occurs, we may have difficulty obtaining sufficient product to meet our needs. This could cause us to fail to meet customer expectations. If customers cease purchasing our products or turn to our competitors to meet their needs, there could be a long-term adverse impact on our revenues and profitability. Our business, financial condition and results of operations could therefore be materially adversely affected as a result of these factors.

We were apprised by one of our sole sourced suppliers that a wafer fabrication foundry it uses to produce integrated circuits for certain of our call center and office headsets is no longer producing those integrated circuit products. The production of these products was shifted to a different wafer fabrication foundry that previously produced these integrated circuits on our behalf. We expect to have new products before our supply of integrated circuits is depleted; however, the new foundry could have difficulties re-establishing the process and re-qualifying the integrated circuits that they are producing on our behalf. If the new wafer fabrication foundry cannot produce these integrated circuits with good quality and in the quantities we require in a timely manner, it is possible that we will not have product available to meet demand. Our revenue might decrease as a result and our customers might be forced to turn to alternative suppliers. A failure to properly produce the integrated circuits in the re-qualified foundry could materially affect our business, financial condition and results of operations.

Because of the lead times required to obtain certain raw materials, sub-assemblies, components and products from certain suppliers, we may not be able to react quickly to changes in demand, potentially resulting in either excess inventories of such goods or shortages of the raw materials, sub-assemblies, components, and products. Lead times are particularly long on silicon-based components incorporating radio frequency and digital signal processing technologies and such components are an increasingly important part of our product costs. In particular, many consumer product orders have shorter lead times than the component lead times, making it increasingly necessary to carry more inventory in anticipation of those orders, which may not materialize. Failure in the future to match the timing of purchases of raw materials, sub-assemblies, components and products to demand could increase our inventories and/or decrease our revenues and could materially adversely affect our business, financial condition and results of operations.

Most of our suppliers are not obligated to continue to provide us with raw materials, components, and sub-assemblies. Rather, we buy most of our raw materials, components and subassemblies on a purchase order basis. Prices for many commodities are rising and are increasing our costs. Additionally, if our suppliers experience increased demand or shortages, it could affect deliveries to us. Any such shortages or further increases in prices could materially adversely affect our business, financial condition, and results of operations.

As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the U.S. Securities and Exchange Commission ("SEC") has proposed disclosure requirements regarding the use of certain minerals, known as conflict minerals, which are mined from the Democratic Republic of Congo and adjoining countries, as well as procedures regarding a manufacturer’s efforts to prevent the sourcing of such minerals and metals produced from those minerals. The implementation of these requirements could affect the sourcing and availability of metals used in the manufacture of a limited number of raw material parts contained in our products. This may reduce the number of suppliers who provide conflict free metals, and may affect our ability to obtain products in sufficient quantities or at competitive prices. Our material sourcing is broad based and multi-tiered, and we domay not ~~respond effectively.~~be able to conclusively verify the origins for all metals used in our products.

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If we do not match production to demand, we may lose business or our gross margins could be materially adversely affected.

Our industry is characterized by ~~rapid~~ technological changes, frequent new product introductions, short-term customer commitments and ~~rapid~~ changes in demand. We determine production levels based on our forecasts of demand for our products. Actual demand for our products depends on many factors, which makes it difficult to forecast. We have experienced differences between our actual and our forecasted demand in the past and expect differences to arise in the future.

Some of our products utilize long-lead time parts which are available from a limited set of vendors. The combined effects of variability of demand among the customer base and significant long-lead time of single sourced materials has historically contributed to significant inventory write-downs, particularly in inventory for consumer products. For OCC products, long life-cycles periodically necessitate last-time buys of raw materials ~~which~~that may be used over the course of several years. We routinely review inventory for usage potential, including fulfillment of customer warranty obligations and spare part requirements. We write down to ~~net realizable~~market value the excess and obsolete inventory. We evaluate the future realizable value of inventories and impact on gross margins, taking ~~int o~~into consideration product life cycles, technological and product changes, demand visibility and other market conditions. We believe our current process for writing down inventory appropriately balances the risk in the marketplace with a fair representation of the realizable value of our inventory.

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In view of the uncertainties inherent in the recovery from the global recession, it is particularly difficult to make accurate forecasts in this business environment. Significant unanticipated fluctuations in supply or demand and the global trend towards consignment of products could cause the following operating problems, among others:

If forecasted demand does not develop, we could have excess inventory and excess capacity. Over-forecast of demand could result in higher inventories of finished products, components, and sub-assemblies. In addition, because our retail customers have pronounced seasonality, we must build inventory well in advance of the December quarter in order to stock up for the anticipated future demand. If we were unable to sell these inventories, we would have to write off some or all of our inventories of excess products and unusable components and sub-assemblies. Excess manufacturing capacity could lead to higher production costs and lower margins.

If demand increases beyond that forecasted, we may have to rapidly increase production. We currently depend on suppliers to provide additional volumes of components and sub-assemblies, and we are experiencing greater dependence on single source suppliers; therefore, we might not be able to increase production rapidly enough to meet unexpected demand. There could be short-term losses of sales while we are trying to increase production. In addition, we may incur increased costs for expediting products.

~~The production and distribution of~~ ~~Bluetooth~~ ~~and other wireless headsets presents many significant manufacturing, marketing and other operational risks and uncertainties including:~~

~~our dependence on third parties to supply key components, many of which have long lead times;~~

~~our ability to forecast demand for the variety of new products within this product category for which relevant data is incomplete or unavailable; and~~

~~longer lead times with suppliers than commitments from some of our customers.~~

The production and distribution of Bluetooth and other wireless headsets presents many significant manufacturing, marketing and other operational risks and uncertainties including:

our dependence on third parties to supply key components, many of which have long lead times;

our ability to forecast demand for the variety of new products within this product category for which relevant data is incomplete or unavailable; and

longer lead times with suppliers than commitments from some of our customers.

If we are unable to deliver products on time to meet the market window of our retail customers, we will lose opportunities to increase revenues and profits, or we may incur penalties for late delivery. We may also be unable to sell these finished goods, which would result in excess or obsolete inventory.

Any of the foregoing problems could materially and adversely affect our business, financial condition, and results of operations.

~~Our consumer~~Prices of certain raw materials, components and sub-assemblies may rise or fall depending upon global market conditions.

We have experienced volatility in costs from our suppliers, particularly in light of the price fluctuations of oil, gold, silver and other commodities and products in the U.S. and around the world. We may continue to experience volatility, which could affect profitability and/or market share. If we experience cost increases and are unable to pass these on to our customers or to achieve operating efficiencies that offset these increases, our business, financial condition and results of operations may be materially and adversely affected.

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We depend on original design manufacturers and contract manufacturers who may not have adequate capacity to fulfill our needs or may not meet our quality and delivery objectives which could have an adverse effect on our ~~financial condition.~~business.

~~Our consumer business, which primarily consists~~Original design manufacturers and contract manufacturers produce key portions of our product lines for us, including the majority of our Bluetooth ~~headsets~~ products. Our reliance on these original design manufacturers and ~~computer~~contract manufacturers involves significant risks, including reduced control over quality and ~~gaming headsets, is highly competitive. The risks faced~~logistics management, the potential lack of adequate capacity and loss of services. Financial instability of our manufacturers or contractors resulting from the global recession or otherwise could result in ~~connection with this include~~our having to find new suppliers which could increase our costs and delay our product deliveries. These manufacturers and contractors may also choose to discontinue manufacturing our products for a variety of reasons. Consequently, we may experience delays in the ~~following:~~timeliness, quality and adequacy of product deliveries, any of which could harm our business and operating results.

~~competition may increase more than we expect and result in product pricing pressures;~~

~~our ability to meet the market windows for consumer products;~~

~~difficulties retaining or obtaining shelf space for consumer products in our sales channel;~~

~~difficulties in achieving a sufficient gross margin and uncertainties in the demand for~~ Currently, the majority of our Bluetooth products are manufactured by GoerTek, a contract manufacturer located in Weifang, China; therefore, the manufacturing of these products is heavily dependent upon GoerTek's ability to deliver the quantities of products that we demand in a timely manner and to meet our quality standards. In the event that GoerTek is unable or unwilling to meet our demand, delivery or price requirements, our Bluetooth business could be severely and materially affected as it may be difficult to ramp-up a new manufacturer on a timely and cost effective basis. ~~headsets and computer and gaming headsets; and~~

the global economic weakness has lessened the amount spent generally by consumers decreasing the demand for consumer products in fiscal 2009 and fiscal 2010 from fiscal 2008 levels; however, demand started to increase in the third and fourth quarters of fiscal 2010.

We have strong competitors and expect to face additional competition in the future. If we are unable to compete effectively, our results of operations may be adversely affected.

All of our markets are intensely competitive. We could experience a decline in average selling prices, competition on sales terms and conditions, or continual performance, technical and feature enhancements from our competitors in the retail market. Also, aggressive industry pricing practices ~~have resulted~~may result in downward pressure on ~~margins from both our primary competitors as well as from less established brands.~~

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margins.

Currently, our single largest competitor is GN Store Nord A/S (“GN”), a Danish telecommunications conglomerate with whom we experience price competition in the business markets. Motorola is a significant competitor in the consumer headset market, primarily in the mobile Bluetooth market, and has a brand name that is very well known and supported with significant marketing investments. Motorola also benefits from the ability to bundle other offerings with its headsets. We are also experiencing competition from other consumer electronics companies that currently manufacture and sell mobile phones or computer peripheral equipment. These competitors generally are larger, offer broader product lines, bundle or integrate with ~~othe r products’~~other products' communications headset tops and bases manufactured by them or others, offer products containing bases that are incompatible with our headset tops and have substantially greater financial, marketing and other resources than we do.

Competitors in audio devices vary by product line. The most competitive product line is headsets for cell phones where we compete with Motorola, Nokia, ~~GN’s~~Aliph's Jawbone brand, Samsung, GN's Jabra brand, ~~Aliph’s Jawbone brand, Samsung,~~Bose, BlueAnt Wireless, and Sony Ericsson among many others. Many of these competitors have substantially greater resources than we have, and each of them has established market positions in this business. In the office and contact center market, the largest competitors are GN and Sennheiser Communications. For the entertainment and computer audio market, our primary competitors are Logitech and Sennheiser. Our product markets are intensely competitive, and market leadership changes frequently as a result of new products, designs and pricing. We are facing additional competition from companies, principally located in the Asia Pacific region, which offer very low cost headset products including products that are modeled on or are direct copies of our products. These new competitors are offering very low cost products which results in pricing pressure in the market. If market prices are substantially reduced by such new entrants into the headset market, our business, financial condition or results of operations could be materially adversely affected.

If we do not ~~continue to~~ distinguish our products, particularly our retail products, through distinctive, technologically advanced features and design, as well as continue to build and strengthen our brand recognition, our business could be harmed. If we do not otherwise compete effectively, demand for our products could decline, our revenues and gross margins could decrease, we could lose market share, and our earnings could decline.

We also compete in the consumer market for the sale of our mobile, gaming, and Clarity products. We believe that effective product promotion is highly relevant in the consumer market, which is dominated by large brands that have significant consumer mindshare. We have invested in marketing initiatives to raise awareness and consideration of ~~the Plantronics’~~Plantronics' products. We believe this will help increase preference for Plantronics and promote headset adoption overall. The consumer market is characterized by relatively rapid product obsolescence, and we are at risk if we do not have the right products at the right time to meet consumer needs. In addition, some of our competitors have significant brand recognition, and we are experiencing more competition in pricing actions which can result in significant losses and excess inventory.

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If we are unable to stimulate growth in our business, if our costs to stimulate demand do not generate incremental profit, or if we experience significant price competition, our business, financial condition, results of operations and cash flows could suffer. In addition, failure to effectively market our products to customers could lead to lower and more volatile revenue and earnings, excess inventory and the inability to recover the associated development costs, any of which could also have a material adverse effect on our business, financial condition, results of operations and cash flows.

~~We depend on original design manufacturers~~Our consumer business is volatile and ~~contract manufacturers who~~failure to compete successfully in this business may ~~not have adequate capacity to fulfill our needs or may not meet our quality and delivery objectives which could~~ have an adverse effect on our ~~business.~~financial condition.

~~Original design manufacturers~~Our consumer business, which consists primarily of Bluetooth headsets and ~~contract manufacturers produce key portions of our product lines for us, including all of our~~ ~~Bluetooth~~ ~~products. Our reliance on these original design manufacturers~~computer and ~~contract manufacturers involves significant~~gaming headsets, is highly competitive. The risks ~~including reduced control over quality and logistics management,~~faced in connection with this include the potential lack of adequate capacity and loss of services. Financial instability of our manufacturers or contractors resulting from the global recession or otherwise could result in our having to find new suppliers which could increase our costs and delay our product deliveries. These manufacturers and contractors may also choose to discontinue building our products for a variety of reasons. Consequently, we may experie nce delays in the timeliness, quality and adequacy of product deliveries, any of which could harm our business and operating results.following:

Ininterest in the ~~fourth quarter~~consumer headset category may be lessening due to current weakening conditions in the consumer market and reduced attach rates of ~~fiscal 2009, we announced our plan to outsource the manufacturing of all of our~~ ~~Bluetooth~~ headsets to GoerTek, Inc., which is an existing supplier located in Weifang, China. As a result, we stopped our manufacturing operations in our Suzhou, China facility during the second quarter of fiscal 2010. Currently, substantially all of our ~~Bluetooth~~ products are manufactured by GoerTek; therefore, the manufacturing of these products is heavily dependent upon GoerTek’s ability to deliver the quantities of products that we demand in a timely manner and to meet our quality standards. In the event that GoerTek is unable to meet our demand, delivery or price requirements, our ~~Bluetooth~~ ~~business could be severely and materially affected as it may be difficult to ramp-up a new manufacturer on a timely and cost effective basis.~~

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~~Prices of certain raw materials, components and sub-assemblies may rise or fall depending upon global market conditions.~~

~~We have experienced volatility in costs from our suppliers, particularly in light of the price fluctuations of oil and other products~~many popular mobile smartphones in the U.S.;

competition may increase more than we expect and around the world. We may continue to experience volatility which could affect profitability and/or market share. If we experience cost increases and are unable to pass these on to our customers or to achieve operating efficiencies that offset these increases, our business, financial condition and results of operations may be materially and adversely affected.result in product pricing pressures;

~~The failure of~~ our ~~suppliers to provide quality components or services in a timely manner could adversely affect our results.~~

~~Our growth and~~ ability to meet ~~customer demand depends~~the market windows for consumer products;

difficulties retaining or obtaining shelf space for consumer products in ~~part on~~ our ability to obtain timely deliveries of raw materials, components, sub-assemblies, and products from our suppliers. We buy raw materials, components and sub-assemblies from a variety of suppliers and assemble them into finished products. We also have certain of our products manufactured for us by third party suppliers. The cost, quality, and availability of such goods are essential to the successful production and sale of our products. Obtaining raw materials, components, sub-assemblies, and finished products entails various risks, including the following:

Rapid increases in production levels to meet unanticipated demand for our products could result in higher costs for components and sub-assemblies, increased expenditures for freight to expedite delivery of required materials, and higher overtime costs and other expenses. These higher expenditures could lower our profit margins. Further, if production is increased rapidly, there may be decreased manufacturing yields, which may also lower our margins.

~~We obtain certain raw materials, sub-assemblies, components and products from single suppliers, including substantially all of our~~ ~~Bluetooth~~ products from GoerTek, Inc. Alternate sources for these items may not be readily available. Any failure of our suppliers to remain in business, to provide us with the quantity of components or products that we need or to purchase the raw materials, subcomponents and parts required by them to produce and provide to us the components or products we need could materially adversely affect our business, financial condition and results of operations.

Although we generally use standard raw materials, parts and components for our products, the high development costs associated with emerging wireless technologies require us to work with only a single source of silicon chip-sets on any particular new product. We, or our supplier(s) of chip-sets, may experience challenges in designing, developing and manufacturing components in these new technologies which could affect our ability to meet market schedules. Due to our dependence on single suppliers for certain chip-sets, we could experience higher prices, a delay in development of the chip-set, or the inability to meet our customer demand for these new products. Additionally, these suppliers or other suppliers may enter into bankruptcy, discontinue production of the parts we depend on or may not be able to produce due to financial difficulties or the global recession. If this occurs, we may have difficulty obtaining sufficient product to meet our needs. This could cause us to fail to meet customer expectations. If customers turn to our competitors to meet their needs, there could be a long-term adverse impact on our revenues and profitability. Our business, operating results and financial condition could therefore be materially adversely affected as a result of these factors.

Because of the lead times required to obtain certain raw materials, sub-assemblies, components and products from certain foreign suppliers, we may not be able to react quickly to changes in demand, potentially resulting in either excess inventories of such goods or shortages of the raw materials, sub-assemblies, components, and products. Lead times are particularly long on silicon-based components incorporating radio frequency and digital signal processing technologies and such components are an increasingly important part of our product costs. In particular, many consumer product orders have shorter lead times than the component lead times, making it increasingly necessary to carry more inventory in anticipation of those orders, which may not materialize. Failure in the future to match the timing of purchases of raw materials, sub-assemblies, components and products to demand co uld increase our inventories and/or decrease our revenues and could materially adversely affect our business, financial condition and results of operations.

Most of our suppliers are not obligated to continue to provide us with raw materials, components, and sub-assemblies. Rather, we buy most of our raw materials, components and subassemblies on a purchase order basis. If our suppliers experience increased demand or shortages, it could affect deliveries to us. In turn, this would affect our ability to manufacture and sell products that are dependent on those raw materials, components, and subassemblies. Any such shortages would materially adversely affect our business, financial condition, and results of operations.

sales channel;

~~Table~~difficulties in achieving or maintaining a sufficient gross margin and uncertainties in the demand for Bluetooth headsets and computer and gaming headsets;

the varying pace of ~~Contents~~global economic recovery creates uncertainty and unpredictability about the demand for consumer products; and

our focus on UC products may weaken our competitive position.

Our business will be materially adversely affected if we are not able to develop, manufacture, and market new products in response to changing customer requirements and new technologies.

The market for our products is characterized by rapidly changing technology, evolving industry standards, short product life cycles and frequent new product introductions. As a result, we must continually introduce new products and technologies and enhance existing products in order to remain competitive.

The technology used in our products is evolving more rapidly now than it has historically, and we anticipate that this trend may accelerate. Historically, the technology used in lightweight communications headsets has evolved slowly. New products have primarily offered stylistic changes and quality improvements rather than significant new technologies. Our increasing reliance and focus on the UC market has resulted in a growing portion of our products that integrate significant new technology. In addition, our increasing participation in the consumer market requires us to adopt new technology and, thus, our consumer products experience shorter lifecycles. We believe this is particularly true for our newer emerging technology products especially in the mobile, computer, residential and certain parts of the office markets. In particular, we anticipate a trend towards more integrated solutions that combine audio, video, and software functionality, while ~~currently~~historically our focus iswas limited to audio products.

In the past, we have experienced a trend away from corded headsets to cordless products. In general, our corded headsets have had higher gross margins than our cordless products, but the margin on cordless headsets is trending higher. In addition, office phones ~~will begin~~have begun to incorporate Bluetooth functionality which ~~would open~~has opened the market to consumer Bluetooth headsets and reduce the demand for our traditional office telephony headsets and adapters as well as impacting potential revenues from our own wireless headset systems, resulting in lost revenue and lower margins. Should we not be able to maintain the higher margins on our cordless products that we recently achieved, our revenue and ~~pro fits~~profits will decrease.

In addition, innovative technologies such as UC have moved the platform for certain of our products from our ~~customers’~~customers' closed proprietary systems to open platforms such as the PC. In turn, the PC has become more open as a result of such technologies as cloud computing and open source code development. As a result, we are exposed to the risk that current and potential competitors could enter our markets and commoditize our products by offering similar products.

The success of our products depends on several factors, including our ability to:

~~anticipate technology and market trends;~~

anticipate technology and market trends;

develop innovative new products and enhancements on a timely basis;

distinguish our products from those of our competitors;

create industrial design that appeals to our customers and end-users;

manufacture and deliver high-quality products in sufficient volumes; and

price our products competitively.

~~develop innovative new products and enhancements on a timely basis;~~

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~~distinguish our products from those of our competitors;~~

~~create industrial design that appeals to our customers and end-users;~~

~~manufacture and deliver high-quality products in sufficient volumes; and~~

~~price our products competitively.~~

If we are unable to develop, manufacture, market and introduce enhanced or new products in a timely manner in response to changing market conditions or customer requirements, including changing fashion trends and styles, it will materially adversely affect our business, financial condition and results of operations. Furthermore, as we develop new generations of products more quickly, we expect that the pace of product obsolescence will increase concurrently. The disposition of inventories of excess or obsolete products may result in reductions to our operating margins and materially adversely affect our earnings and results of operations.

We have significant foreign manufacturing operations and rely on third party manufacturers that are inherently risky, and a significant amount of our revenues are generated internationally.

We have a manufacturing facility in Tijuana, Mexico. We also have suppliers and other vendors throughout Asia, including GoerTek, Inc. located in Weifang, China, which is the manufacturer of the majority of our Bluetooth products. We also generate a significant amount of our revenues from foreign customers.

~~Table~~The types of ~~Contents~~risks faced in connection with international operations and sales include, among others:

fluctuations in foreign currency exchange rates;

cultural differences in the conduct of business;

greater difficulty in accounts receivable collection and longer collection periods;

the impact of recessionary, volatile or adverse global economic conditions;

reduced protection for intellectual property rights in some countries;

unexpected changes in regulatory requirements;

tariffs and other trade barriers;

political conditions, health epidemics, civil unrest or criminal activities within each country;

the management and operation of an enterprise spread over various countries;

the burden and administrative costs of complying with a wide variety of foreign laws and regulations;

currency restrictions; and

compliance with anti-bribery laws, including, without limitation, compliance with the Foreign Corrupt Practices Act (“FCPA”).

The above-listed and other inherent risks of international operations could materially adversely affect our business, financial condition and results of operations.

We sell our products through various channels of distribution that can be volatile, and failure to establish and maintain successful relationships with our channel partners could materially adversely affect our business, financial condition, or results of operations. In addition, ~~we have experienced the bankruptcy of certain customers and further~~ bankruptcies or financial difficulties of our customers may ~~occur.~~impact our business.

We sell substantially all of our products through distributors, retailers, OEMs, and telephony service providers. Our existing relationships with these parties are not exclusive and can be terminated by either party without cause. These customers also sell or may sell products offered by our competitors. To the extent that our competitors offer these customers more favorable terms or more compelling products, such customers may decline to carry, de-emphasize, or discontinue carrying our products. In the future, we may not be able to retain or attract a sufficient number of qualified distributors, retailers, OEMs, and telephony service providers. Further, such customers may not recommend or may stop recommending our products. In the future, our OEMs or potential OEMs may elect to manufacture their own products that are similar to those we currently sell to them. The inability to establish or maintain successful relationships with distributors, OEMs, retailers and telephony service providers or to expand our distribution channels could materially adversely affect our business, financial condition, or results of operations. Finally, as a result of the global ~~recession~~economic weakness we have experienced the bankruptcy of certain customers, and it is not possible to predict whether additional bankruptcies of our customers may occur.

As a result of the evolution of our consumer business, our customer mix is changing, and certain retailers, OEMs, and wireless carriers are more significant. This reliance on certain large channel partners could increase the volatility of our revenues and earnings. In particular, we have several large customers whose order patterns are difficult to predict. Offers and promotions by these customers may result in significant fluctuations of their purchasing activities over time. If we are unable to anticipate the purchase requirements of these customers, our revenues may be adversely affected, or we may be exposed to large volumes of inventory that cannot be immediately resold to other customers.

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We are exposed to fluctuations in foreign currency exchange rates which may adversely affect our revenues, gross profit, and profitability.

Fluctuations in foreign currency exchange rates impact our revenues and profitability because we report our financial statements in U.S. Dollars, whereas a significant portion of our sales to customers are transacted in other currencies, particularly the Euro and the Great Britain Pound (“GBP”). Furthermore, fluctuations in foreign ~~currencies~~currency rates impact our global pricing strategy resulting in our lowering or raising selling prices in one or more currencies in order to avoid disparity with U.S. Dollar prices and to respond to currency-driven competitive pricing actions. We also have significant manufacturing operations in Mexico and fluctuations in the Mexican Peso exchange rate can impact our gross profit and profitability. Currency exchange rates are ~~difficult to predict,~~volatile, and while we ~~may not be abl e to predict~~hedge our major exposures, changes in exchange rates in the ~~future.~~future may still have a negative impact on our financial results. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments.

We hedge a portion of our Euro and GBP forecasted revenue ~~exposure~~exposures for the future 12 month period. In addition, ~~in the second quarter of fiscal 2010~~ we ~~began hedging~~hedge a portion of our Peso forecasted cost of revenues. Although we have employed these hedging techniques to minimize these risks, we can offer no assurance that such strategies will be effective. ~~Over the past three-month period, the value of the Euro and the GBP against the U.S. Dollar has declined by approximately 10% and 6%, respectively.~~ If the Euro and GBP ~~continue to~~ fall against the U.S. Dollar, ~~or if the current exchange rates continue,~~ our revenues, gross profit and profitability in the future could be negatively affected.

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~~We have significant foreign manufacturing operations and rely on third party manufacturers that are inherently risky, and a significant amount of our revenues are generated internationally.~~

~~We have a manufacturing facility in Tijuana, Mexico. We stopped our manufacturing operations at our Suzhou, China facility during the second quarter of fiscal 2010.~~ We also have ~~suppliers~~foreign currency forward contracts denominated in Euros, GBP and ~~other vendors throughout Asia, including GoerTek, Inc. located in Weifang, China,~~Australian Dollars which ~~is the primary manufacturer~~hedge against a portion of our ~~Bluetooth~~ ~~products. We also generate a significant amount~~foreign-currency denominated assets and liabilities. Our foreign currency forward contracts reduce, but do not eliminate, the impact of ~~our revenues from foreign customers. The inherent risks of international operations could materially adversely affect our business, financial condition, and results of operations.~~

~~The types of risks faced~~currency exchange rate movements. For example, we do not execute forward contracts in ~~connection with international operations and sales include, among others:~~

~~fluctuations in foreign currency exchange rates;~~

~~cultural differences in the conduct of business;~~

~~greater difficulty in accounts receivable collection and longer collection periods;~~

~~the impact of recessionary, volatile or adverse global economic conditions;~~

~~reduced protection for intellectual property rights in some countries;~~

~~unexpected changes in regulatory requirements;~~

~~tariffs and other trade barriers;~~

~~political conditions, civil unrest or criminal activities within each country;~~

~~the management and operation of an enterprise spread over various countries;~~

~~the burden and administrative costs of complying with a wide variety of foreign laws and regulations; and~~

~~currency restrictions.~~

all currencies in which we conduct business.

Our corporate tax rate may increase, which could adversely impact our cash flow, financial condition and results of operations.

We have significant operations in various tax jurisdictions throughout the world, and a substantial portion of our taxable income ~~historically~~ has been generated historically in jurisdictions outside of the U.S. Currently, some of our operations are taxed at rates substantially lower than U.S. tax rates. If our income in these lower tax jurisdictions were no longer to qualify for these lower tax rates, the applicable tax laws were rescinded or changed, or the mix of our earnings shifts from lower rate jurisdictions to higher rate jurisdictions, our operating results could be materially adversely affected. While we are looking at opportunities to reduce our tax rate, there is no assurance that our tax planning strategies will be successful. In addition, many of these strategies will require a period of tim e to implement. Moreover, ifIf U.S. or other foreign tax authorities change applicable tax laws or successfully challenge the manner in which our profits are currently recognized, our overall taxes could increase, and our business, cash flow, financial condition, and results of operations could be materially adversely affected.

Our Board of Directors has authorized the repurchase of up to 7,000,000 shares of our common stock to enhance stockholder value which enhanced value may not be realized. Stock repurchases may not prove to be the best use of our cash resources and may require us to draw funds on our new credit agreement.

In May 2011, our Board of Directors authorized the repurchase of up to 7,000,000 shares of our outstanding common stock. On May 9, 2011, we entered into two separate Master Confirmation and Supplemental Confirmations with Goldman, Sachs & Co. (“Goldman”) pursuant to an accelerated share repurchase program (the “ASR Program”) under which we will repurchase shares of our common stock for an aggregate purchase price of $100 million, which was paid to Goldman in May 2011. To augment our financial flexibility to facilitate this share repurchase program, on May 9, 2011, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association which provides for a $100 million unsecured revolving credit facility. At the closing of the Credit Agreement and through the filing of this Form 10-K, we did not draw any funds under the facility as we used domestic cash on hand to make the payment to Goldman.

There can be no assurance of the following:

the impact on our stock price as a result of the ASR Program; and

when or if we will repurchase additional shares under the 7,000,000 share authorization or to make additional stock repurchases thereafter;

Also, we will require additional funds to repurchase shares over and above those in the ASR Program. If we do not generate further domestic cash flow from operations, to make our repurchases, we may be required to draw funds on the Credit Agreement at which time we would incur interest expense. The Credit Agreement contains affirmative and negative covenants with which we must comply. These restrictions apply regardless of whether any loans are outstanding and could adversely impact how we operate our business.

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We are subject to environmental laws and regulations that expose us to a number of risks and could result in significant liabilities and costs.

There are multiple initiatives in several jurisdictions regarding the removal of certain potential environmentally sensitive materials from our products to comply with the European Union (“EU”) and other Directives on the Restrictions of the use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) and on Waste Electrical and Electronic Equipment (“WEEE”). In certain jurisdictions, the RoHS legislation was enacted as of July 1, 2006; however, other jurisdictions have delayed implementation. While we believe that we will have the resources and ability to fully meet the requirements of the RoHS and WEEE directives universally, if unusual occurrences arise or we are wrong in our assessment of what it will take to fully comply, there is a risk that we will not be able to comply with the legislation as passed by the EU member states or other global jurisdictions. If this were to happen, a material negative effect on our financial results may occur.

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We are subject to various federal, state, local, and foreign environmental laws and regulations on a global basis, including those governing the use, discharge, and disposal of hazardous substances in the ordinary course of our manufacturing process. Although we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations, it is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted in any given country to create environmental liability with respect to our facilities, operations, or products. To the extent that we incur claims for environmental matters exceeding reserves or insurance for environmental liability, our operating results could be negatively impacted.

Our products are subject to various regulatory requirements, and changes in such regulatory requirements may adversely impact our gross margins as we comply with such changes or reduce our ability to generate revenues if we are unable to comply.

Our products must meet the requirements set by regulatory authorities in the numerous jurisdictions in which we sell them. For example, certain of our office and contact center products must meet certain standards to work with local phone systems. Certain of our wireless office and mobile products must work within existing frequency ranges permitted in various jurisdictions. As regulations and local laws change, we must modify our products to address those changes. Regulatory restrictions may increase the costs to design, manufacture, and sell our products, resulting in a decrease in our margins or a decrease in demand for our products if the costs are passed along. Compliance with regulatory restrictions may impact the technical quality and capabilities of our products reducing th eir marketability. If we do not comply with these regulations, our products might interfere with other devices that properly use the frequency ranges in which our products operate, and we may be responsible for the damages that our products cause. This could result in our having to alter the performance of our products and make payment of substantial monetary damages or penalties.

We have intellectual property rights that could be infringed on by others, and we may infringe on the intellectual property rights of others. Even if we prevail, claims and lawsuits are costly and time consuming to pursue or defend and may divert ~~management’s~~management's time from our business.

Our success depends in part on our ability to protect our copyrights, patents, trademarks, trade dress, trade secrets, and other intellectual property, including our rights to certain domain names. We rely primarily on a combination of nondisclosure agreements and other contractual provisions as well as patent, trademark, trade secret, and copyright laws to protect our proprietary rights. Effective trademark, patent, copyright, and trade secret protection may not be available in every country in which our products and media properties are distributed to customers. The process of seeking intellectual property protection can be lengthy and expensive. Patents may not be issued in response to our applications, and any patents that may be issued may be invalidated, circumvented, or challenged by ~~o thers.~~others. If we are required to enforce our intellectual property or other proprietary rights through litigation, the costs and diversion of management's attention could be substantial. In addition, the rights granted under any intellectual property may not provide us competitive advantages or be adequate to safeguard and maintain our proprietary rights. Moreover, the laws of certain countries do not protect our proprietary rights to the same extent as do the laws of the U.S. If we do not enforce and protect our intellectual property rights, it could materially adversely affect our business, financial condition, and results of operations.

Patents, copyrights, trademarks, and trade secrets are owned by individuals or entities that may make claims or commence litigation based on allegations of infringement or other violations of intellectual property rights. As we have grown, the intellectual property rights claims against us have increased. There has also been a general trend of increasing intellectual property assertion against corporations that make and sell products. Our products and technologies may be subject to certain third-party claims and, regardless of the merits of the claim, intellectual property claims are often time-consuming and expensive to litigate, settle, or otherwise resolve. In addition, to the extent claims against us are successful, we may have to pay substantial monetary damages or discontinue the ~~manufa cture~~manufacture and distribution of products that are found to be in violation of another ~~party’s~~party's rights. We also may have to obtain, or renew on less favorable terms, licenses to manufacture and distribute our products, which may significantly increase our operating expenses. In addition, many of our agreements with our distributors and resellers require us to indemnify them for certain third-party intellectual property infringement claims. Discharging our indemnity obligations may involve time-consuming and expensive litigation and result in substantial settlements or damages awards, ~~result in~~ our products being enjoined, and ~~result in~~ the loss of a distribution channel or retail partner.

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Our products must meet the requirements set by regulatory authorities in the numerous jurisdictions in which we sell them. For example, certain of our office and contact center products must meet certain standards to work with local phone systems. Certain of our wireless office and mobile products must work within existing frequency ranges permitted in various jurisdictions. As regulations and local laws change, we must modify our products to address those changes. Regulatory restrictions may increase the costs to design, manufacture, and sell our products, resulting in a decrease in our margins or a decrease in demand for our products if the costs are passed along. Compliance with regulatory restrictions may impact the technical quality and capabilities of our products reducing their marketability. If we do not comply with these regulations, our products might interfere with other devices that properly use the frequency ranges in which our products operate, and we may be responsible for the damages that our products cause. This could result in our having to alter the performance of our products and make payment of substantial monetary damages or penalties.

We are exposed to potential lawsuits alleging defects in our products and/or other claims related to the use of our products.

The sales of our products expose us to the risk of product liability and hearing loss claims. These claims have in the past been, and are currently being, asserted against us. None of the previously resolved claims have materially affected our business, financial condition, or results of operations, nor do we believe that any of the pending claims will have such an effect. Although we maintain product liability insurance, the coverage provided under our policies could be unavailable or insufficient to cover the full amount of any such claim. Therefore, successful product liability or hearing loss claims brought against us could have a material adverse effect upon our business, financial condition, and results of operations.

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Our mobile headsets are used with mobile telephones. There has been continuing public controversy over whether the radio frequency emissions from mobile phones are harmful to users of mobile phones. We believe that there is no conclusive proof of any health hazard from the use of mobile phones but research in this area is incomplete. We have tested our headsets through independent laboratories and have found that use of our corded headsets reduces radio frequency emissions at the user's head to virtually zero. Our Bluetooth and other wireless headsets emit significantly less powerful radio frequency emissions than mobile phones. However, if research establishes a health hazard from the use of mobile phones or public ~~controver sy~~controversy grows even in the absence of conclusive research findings, there could be an adverse impact on the demand for mobile phones, which could reduce demand for headset products. Likewise, should research establish a link between radio frequency emissions and wireless headsets and public concern in this area grows, demand for our wireless headsets could be reduced creating a material adverse effect on our financial results.

There is also continuing and increasing public controversy over the use of mobile phones by operators of motor vehicles. While we believe that our products enhance driver safety by permitting a motor vehicle operator to generally be able to keep both hands free to operate the vehicle, there is no certainty that this is the case, and we may be subject to claims arising from allegations that use of a mobile phone and headset contributed to a motor vehicle accident. We maintain product liability insurance and general liability insurance that we believe would cover any such ~~claims. However,~~claims; however, the coverage provided under our policies could be unavailable or insufficient to cover the full amount of any such claim. Therefore, successful product liability claims brought against us could have a material adverse effect upon our business, financial condition, and results of operations.

We have $14.9 million of goodwill and intangible assets recorded on our balance sheet, and we have incurred significant impairment losses over the last two fiscal years recorded in discontinued operations. If the carrying value of our goodwill or intangible assets is not recoverable, an impairment loss may be recognized, which would adversely affect our financial results.

As a result of past acquisitions, the Company has $14.9 million of goodwill and intangible assets on the consolidated balance sheets as of March 31, 2011. It is not possible at this time to determine if any future impairment charge would result or, if it does, whether such charge would be material related to these remaining assets. If such a charge is necessary, it may have a material adverse affect our financial results.

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Our stock price may be volatile and the value of your investment in Plantronics stock could be diminished.

The market price for our common stock has been affected and may continue to be affected by a number of factors, including:

uncertain economic conditions, including the length of the recovery from the domestic and global recession, inflationary pressures, and a potential decline in investor confidence in the market place;

changes in our published forecasts of future results of operations;

~~changes in our published forecasts of future results of operations;~~

quarterly variations in our or our competitors' results of operations and changes in market share;

the announcement of new products or product enhancements by us or our competitors;

~~quarterly variations in our or our competitors' results of operations and changes in market share;~~

repurchases of our common shares under our repurchase plans, including our accelerated share repurchase program;

our decision to declare dividends;

~~the announcement of new products or product enhancements by us or our competitors;~~

the loss of services of one or more of our executive officers or other key employees;

changes in earnings estimates or recommendations by securities analysts;

~~a deterioration of the current economy could impact our decision to declare future dividends;~~

developments in our industry;

sales of substantial numbers of shares of our common stock in the public market;

~~the loss of services of one or more of our executive officers or other key employees;~~

general economic, political, and market conditions, including market volatility; and

~~changes in earnings estimates or recommendations by securities analysts;~~

~~developments in our industry;~~

~~sales of substantial numbers of shares of our common stock in the public market;~~

~~general economic, political, and market conditions, including market volatility; and~~

other factors unrelated to our operating performance or the operating performance of our competitors.

War, terrorism, public health issues, natural disasters, or other business interruptions could disrupt supply, delivery, or demand of products, which could negatively affect our operations and performance.

War, terrorism, public health issues, or other business interruptions whether in the U.S. or abroad, have caused or could cause damage or disruption to international commerce by creating economic and political uncertainties that may have a strong negative impact on the global economy, our company, and our suppliers or customers. Our major business operations are subject to interruption by earthquake, flood, volcanic eruptions or other natural disasters, fire, power shortages, terrorist attacks and other hostile acts, public health issues, flu or similar epidemics, and other events beyond our control. Our corporate headquarters, information technology, manufacturing, certain research and development activities, and other critical business operations are located near major seismic faults or flood zones. W hile we are partially insured for earthquake-related losses or floods, our operating results and financial condition could be materially affected in the event of a major earthquake or other natural or manmade disaster.

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Although it is impossible to predict the occurrences or consequences of any of the events described above, such events could significantly disrupt our operations. In addition, should major public health issues arise, including pandemics, we could be negatively impacted by the need for more stringent employee travel restrictions, limitations in the availability of freight services, governmental actions limiting the movement of products between various regions, delays in production ramps of new products, and disruptions in the operations of our manufacturing vendors and component suppliers. Our operating results and financial condition could be adversely affected by these events.

Our business could be materially adversely affected if we lose the benefit of the services of key personnel.

Our success depends to a large extent upon the services of a limited number of executive officers and other key employees. The unanticipated loss of the services of one or more of our executive officers or key employees could have a material adverse effect upon our business, financial condition, and results of operations.

We also believe that our future success will depend in large part upon our ability to attract and retain additional highly skilled technical, management, sales and marketing personnel. Competition for such personnel is intense. We may not be successful in attracting and retaining such personnel, and our failure to do so could have a material adverse effect on our business, operating results or financial condition.

We may still be subject to certain liabilities from our discontinued AEG business segment.

Under the terms of the Asset Purchase Agreement, dated October 2, 2009, a First Amendment to the Asset Purchase Agreement, dated November 30, 2009, a Side Letter to the Asset Purchase Agreement, dated January 8, 2010, and a second Side Letter to the Asset Purchase Agreement, dated February 15, 2010 (collectively, the “Purchase Agreement”), we retained certain assets and liabilities of Altec Lansing as of the closing date, December 1, 2009 and may be required to indemnify the Purchaser for certain losses they may incur. If the Purchaser incurs certain losses, the Purchaser may make an indemnification claim and we may be required to pay certain expenses or reimburse Purchaser for losses they incur, which could harm our operating results. In addition, our ability to defend ourselves may be impaired because most of our former AEG employees are employees of the Purchaser and our management may have to devote a substantial amount of time to resolving the claim, and, as we are no longer in the AEG business, we may not be able to readily offer products, service and intellectual property in settlement. In addition, these indemnity claims may divert management attention from our continued business. It may also be difficult to determine whether a claim from a third party stemmed from actions taken by us or the Purchaser and we may expend substantial resources trying to determine which party has responsibility for the claim.

We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, our management is required to report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting. We have an ongoing program to perform the system and process evaluation and testing necessary to comply with these requirements.

We have and will continue to consume management resources and incur significant expenses for Section 404 compliance on an ongoing basis. In the event that our chief executive officer, chief financial officer, or independent registered public accounting firm determines in the future that our internal control over financial reporting is not effective as defined under Section 404, investor perceptions may be adversely affected and could cause a decline in the market price of our stock.

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War, terrorism, public health issues, or other business interruptions whether in the U.S. or abroad, have caused or could cause damage or disruption to international commerce by creating economic and political uncertainties that may have a strong negative impact on the global economy, our company, and our suppliers or customers. Our major business operations are subject to interruption by earthquake, flood, volcanic eruptions or other natural disasters, fire, power shortages, terrorist attacks and other hostile acts, public health issues, flu or similar epidemics, and other events beyond our control. Our corporate headquarters, information technology, manufacturing, certain research and development activities, and other critical business operations are located near major seismic faults or flood zones. While we are partially insured for earthquake-related losses or floods, our operating results and financial condition could be materially affected in the event of a major earthquake or other natural or manmade disaster.

We have a limited number of suppliers based in Japan who appear to have been directly affected by the earthquake, tsunami and nuclear crisis that occurred in Japan in March 2011. While their impact on our business does not appear to be material at this time, if that were to change, our business could be adversely affected.

Provisions in our charter documents and Delaware law and our adoption of a stockholder rights plan may delay or prevent a third party from acquiring us, which could decrease the value of our stock.

Our Board of Directors has the authority to issue preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting and conversion rights, of those shares without any further vote or action by the stockholders. The issuance of our preferred stock could have the effect of making it more difficult for a third party to acquire us. In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which could also have the effect of delaying or preventing our acquisition by a third party. Further, certain provisions of our Certificate of Incorporation and bylaws could delay or make more difficult a merger, tender offer or proxy contest, which could adversely affect the market price of our common stock.

In 2002, our Board of Directors adopted a stockholder rights plan, pursuant to which we distributed one right for each outstanding share of common stock held by stockholders of record as of April 12, 2002. Because the rights may substantially dilute the stock ownership of a person or group attempting to take us over without the approval of our Board of Directors, the plan could make it more difficult for a third party to acquire us, or a significant percentage of our outstanding capital stock, without first negotiating with our Board of Directors regarding such acquisition.

We have $17.5 million of goodwill and intangible assets recorded on our balance sheet, and we have incurred significant impairment losses over the last two fiscal years recorded in discontinued operations. If the carrying value of our goodwill or intangible assets is not recoverable, an impairment loss may be recognized, which would adversely affect our financial results.

As a result of past acquisitions, the Company has $17.5 million of goodwill and intangible assets on the consolidated balance sheets related to our continuing operations. It is not possible at this time to determine if any future impairment charge would result or, if it does, whether such charge would be material related to these remaining assets. If such a charge is necessary, it may have a material adverse affect our financial results.

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~~There remain risks from the sale of Altec Lansing, our discontinued AEG business segment.~~

Pursuant to the Purchase Agreement, we have agreed to indemnify the Purchaser following the closing of the transaction up to its one year anniversary against specified losses in connection with the AEG business and generally retain responsibility for various legal liabilities that may accrue. We have also made representations and warranties to the Purchaser about the condition of AEG, including matters relating to intellectual property, employee matters and environmental laws. Following the closing, if the Purchaser makes an indemnification claim because it has suffered a loss or a third party has commenced an action against the Purchaser, we may incur substantial expenses resolving the Purchaser’s claim or defending the Purchaser and ourselves against the third party action which would harm our operating re sults. In addition, our ability to defend ourselves may be impaired because most of our former AEG employees are employees of the Purchaser and our management may have to devote a substantial amount of time to resolving the claim, and, as we are no longer in the AEG business, we may not be able to readily offer products, service and intellectual property in settlement. In addition, these indemnity claims may divert management attention from our continued business. It may also be difficult to determine whether a claim from a third party stemmed from actions taken by us or the Purchaser and we may expend substantial resources trying to determine which party has responsibility for the claim.

~~We may be required to record further impairment charges on our investments in auction rate securities.~~

The uncertainties in the credit markets have affected all of our auction rate securities (“ARS”) holdings, and, as a consequence, these investments are not currently liquid and, we will not be able to access these funds until a future auction of these investments is successful, the underlying securities are redeemed by the issuer, or a buyer is found outside of the auction process. In November 2008, we accepted an agreement (the “Agreement”) from UBS AG (“UBS”), the investment provider for our now $23.3 million par value ARS portfolio, granting us certain rights relating to our ARS (the “Rights”). The Rights permit us to require UBS to purchase our ARS at par value, which is defined as the price equal to the liquidation preference of the ARS plus accrued but unpaid d ividends or interest, at any time during the period from June 30, 2010 to July 2, 2012. Conversely, UBS has the right, in its discretion, to purchase or sell the ARS at any time until July 2, 2012, so long as we receive payment at par value upon any sale or liquidation. We expect to sell our ARS under the Rights; however, if we do not exercise the Rights before July 2, 2012, they will expire and UBS will have no further rights or obligation to buy the ARS. UBS’s obligations under the Rights are not secured and do not require UBS to obtain any financing to support its performance obligations under the Rights. UBS has disclaimed any assurance that it will have sufficient financial resources to satisfy its obligations under the Rights. Although we currently have the ability to hold these ARS investments until a recovery of the auction process, until maturity or until purchased by UBS, if UBS does not purchase the ARS as per their Agreement, the curren t market conditions deteriorate further or a recovery in market values does not occur, we may incur further other-than-temporary impairment charges resulting in further losses in our statement of operations, which would reduce net income.

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ITEMITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEMITEM 2. PROPERTIES

Our principal executive offices are located in Santa Cruz, California. Our facilities are located throughout the Americas, Europe, and Asia. The table below lists the major facilities owned or leased as of March 31, ~~2010:~~2011:



Location	Square Footage	Lease/Own	Primary Use

Chattanooga, Tennessee	16,650	Lease	Light Assembly, Sales and Marketing, Engineering, Administration
Hoofddorp, Netherlands	14,788	Lease	Administrative
San Diego, California	13,400	Lease	Industrial and Office Space
Santa Cruz, California	79,253	Own	Light Assembly, Sales and Marketing, Engineering, Administration
Santa Cruz, California	44,183	Own	Light Assembly, Sales, Engineering, Administration
Santa Cruz, California	39,892	Own	Light Assembly, Sales, Engineering, Administration
Santa Cruz, California	18,250	Lease	Light Assembly, Sales, Engineering, Administration
Santa Cruz, California	20,325	Lease	Light Assembly, Sales, Engineering, Administration
~~Shenzhen,~~Suzhou, China	~~23,250~~42,012	Lease	Sales, Engineering, Administration, ~~and Design Center~~
~~Suzhou, P.R. China~~ 1	~~145,732~~	~~Own~~	~~Assembly~~
~~Suzhou, P.R.China~~	~~64,051~~	~~Own~~	~~Engineering, Administration and~~ Design Center
Tijuana, Mexico	95,980	Lease	Engineering, Assembly, Administration
Tijuana, Mexico	61,785	Lease	Engineering, Assembly
Tijuana, Mexico	289,589	Lease	Logistic and Distribution Center
Tijuana, Mexico	53,732	Lease	Engineering, ~~Assembly,~~ Design Center, Call Center
Wootton ~~Basset,~~Bassett, UK	21,824	Own	Light Assembly, Sales, Engineering, Administration
Wootton ~~Basset,~~Bassett, UK	15,970	Own	~~Light Assembly, Sales, Engineering, Administration~~Vacant (leased to a third party in fiscal 2012)
Wootton ~~Basset,~~Bassett, UK	5,445	Lease	Sales, ~~and~~ Marketing, Administration

We believe that our existing properties are suitable and generally adequate for our current business; however, future growth may require that we obtain additional space.

~~In March 2009, we announced our plans to outsource the production of our~~ ~~Bluetooth~~ products in China. As a result, in July 2009, we closed our facility in Suzhou, China, and we are currently marketing the facility and the related land rights for sale and have entered into a non-binding letter of intent to sell the facility. Our intention is for ~~Bluetooth~~ research and development, supply chain management as well as sales, marketing and administrative support functions, which are all part of our Asia Pacific hub, to continue to be led from our Suzhou facility until our Suzhou facility is sold, at which time, our employees will be relocated to a new nearby location better suited for their continuing responsibilities.

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ITEMITEM 3. LEGAL PROCEEDINGS

Six class action lawsuits have been filed against the Company alleging that our Bluetooth headsets may cause noise-induced hearing loss. Shannon Wars et al. vs. Plantronics, Inc. was filed on November 14, 2006 in the U.S. District Court for the Eastern District of Texas. Lori Raines, et al. vs. Plantronics, Inc. was filed on October 20, 2006 in the U.S. District Court, Central District of California. Kyle Edwards, et al vs. Plantronics, Inc. was filed on October 17, 2006 in the U.S. District Court, Middle District of Florida. Ralph Cook vs. Plantronics, Inc. was filed on February 8, 2007 in the U.S. District Court for the Eastern District of Virginia. Randy Pierce vs. Plantronics, Inc. was filed on January 10, 2007 in the U.S. District Court for the Eastern District of Arkansas. Bruce Schiller, et al vs. Plantronics, Inc. was filed on October 10, 2006 in the Superior Court of the State of California in and for the County of Los Angeles. The complaints state that they do not seek damages for personal injury to any individual. These complaints seek various remedies, including injunctive relief requiring the Company to include certain additional warnings with its Bluetooth headsets and to redesign the headsets to limit the volume produced, or, alternatively, to provide the user with the ability to determine the level of sound emitted from the headset. Plaintiffs also seek unspecified general, special, and punitive damages, as well as restitution. The federal cases have been consolidated for all pre-trial purposes in the U.S. District Court for the Central District of Los Angeles before Judge Fischer. The California State Court case was dismissed by the plaintiffs. The parties agreed in principle to settle their claims. The U.S. District Court for the Central District of Los Angeles signed an order approving the final settlement of the lawsuit entitled In Re Bluetooth Headset Products Liability Litigation brought against Plantronics, Inc., Motorola, Inc. and GN Netcom, Inc. alleging that the three companies failed to adequately warn consumers of the potential for long term noise induced hearing loss if they used Bluetooth headsets. The companies contested the claims of the lawsuit but settled the lawsuit on a nationwide basis for an amount which we believe is less than the cost of litigating and winning the lawsuit. On September 25, 2009, the Court signed a judgment in the case resolving all matters except the issue of outstanding attorneys’ fees, which will be split among the three defendants. On October 22, 2009, the Court issued an order setting the class counsel’s attorneys’ fees and costs and the incentive award at the maximum amounts agreed to by the parties in their settlement. The objectors to the settlement have filed a notice of appeal, and the appeal is in process. We believe that any loss related to these proceedings would not be material and have adequately reserved for these costs in the consolidated financial statements.

In addition, we are presently engaged in various legal actions arising in the normal course of our business. We believe that it is unlikely that any of these actions will have a material adverse impact on our operating results; however, because of the inherent uncertainties of litigation, the outcome of any of these actions could be unfavorable and could have a material adverse effect on our financial condition, results of operations or cash flows.

ITEMITEM 4. (REMOVED AND RESERVED)

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PART II

~~ITE~~MITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES

Price Range of Common Stock

Our common stock is publicly traded on the NYSE under the symbol “PLT”. The following table sets forth the low and high sales prices as reported on the NYSE for each period indicated.

	Low		High
Fiscal 2009

					Low		High
Fiscal 2011
First Quarter	$	18.89	$	25.18	$	27.80	$	34.17
Second Quarter		20.69		26.06	26.79		34.28
Third Quarter		9.89		22.52	33.30		38.20
Fourth Quarter		7.84		14.06	33.75		38.04
Fiscal 2010
First Quarter	$	11.40	$	18.31	$	11.40	$	18.31
Second Quarter		17.28		28.07	17.28		28.07
Third Quarter		23.15		27.23	23.15		27.23
Fourth Quarter		24.45		32.13	24.45		32.13

As of ~~May 1, 2010,~~April 30, 2011, there were approximately 70 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of beneficial owners, we are unable to estimate the total number of beneficial owners. On April 1, ~~2010,~~2011, the last trading day of fiscal ~~2010,~~2011, the last sale reported on the ~~New York Stock Exchange~~NYSE for Plantronics’ common stock was ~~$31.10~~$36.60 per share.

Cash Dividends

In fiscal ~~2009~~2011 and 2010, we declared quarterly cash dividends of $0.05 per share resulting in total dividends declared of ~~$9.8~~$9.7 million ~~in each year.~~ and $9.8 million, respectively.

On May ~~4, 2010,~~3, 2011, the Company announced that the Board of Directors had declared the Company’s ~~twentieth~~twenty-eighth quarterly cash dividend of $0.05 per share of the Company’s common stock, payable on June 10, ~~2010~~2011 to stockholders of record on May 20, ~~2010.~~2011.

The actual declaration of future dividends and the establishment of record and payment dates are subject to final determination by the Audit Committee of the Board of Directors of Plantronics each quarter after its review of our financial performance and financial position.

Share Repurchase Programs

OnFrom time to time, the Board of Directors authorizes plans under which we may repurchase shares of our common stock in the open market, depending on the market conditions.

During fiscal 2009, we repurchased in the open market 1,007,500 shares of our common stock which were remaining under the 1,000,000 repurchase plans each authorized by the Board of Directors on January 25, 2008 and November 10, 2008 The total cost of these repurchases was $17.8 million with an average price of $17.68 per share.

During fiscal 2010, we repurchased in the open market 1,935,100 shares of our common stock which were under repurchase plans authorized by the Board of Directors on the following dates: November 10, 2008, November 27, 2009 and March 1, 2010 for 1,000,000 shares each. The total cost of these repurchases was $49.7 million with an average price of $25.66 per share.

During fiscal 2011, we repurchased in the open market 3,315,000 shares of our common stock which were under repurchase plans authorized by the Board of Directors on the following dates: March 1, 2010, June 4, 2010, August 27, 2010 and March 1, 2011 for 1,000,000 shares each. The total cost of these repurchases was $105.5 million with an average price of $31.83 per share.

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As of March 31, 2011, there were 660,900 remaining shares authorized for repurchase under the March 1, 2011 authorized plan.

On May 2, 2011, subsequent to the end of our fiscal year, the Board of Directors authorized the repurchase of ~~1,000,000~~up to 7,000,000 shares of our outstanding common ~~stock under which the Company may purchase shares in the open market, depending~~stock. As part of this authorization, on ~~the market conditions, from time~~May 9, 2011, we entered into two separate Master Confirmation and Supplemental Confirmations with Goldman, Sachs & Co. to ~~time. During fiscal 2008 and 2009, we repurchased 1,000,000 shares~~repurchase an aggregate of $100 million of our common stock under ~~this~~an accelerated share repurchase ~~plan in the open market at a total cost of $18.3 million and an average price of $18.30 per share.~~program.

On November 10, 2008, the Board of Directors authorized a new plan to repurchase 1,000,000 shares of common stock. During fiscal 2009 and 2010, we repurchased 1,000,000 shares of our common stock under this plan in the open market at a total cost of $23.7 million and an average price of $23.66 per share.

On November 27, 2009, the Board of Directors authorized a new plan to repurchase 1,000,000 shares of common stock. During fiscal 2010, we repurchased 1,000,000 shares of our common stock under this plan in the open market at a total cost of $26.3 million and an average price of $26.26 per share.

On March 1, 2010, the Board of Directors authorized a new plan to repurchase 1,000,000 shares of common stock. During fiscal 2010, we repurchased 24,100 shares of our common stock under this plan in the open market at a total cost of $0.8 million and an average price of $31.31 per share. As of March 31, 2010, there were 975,900 remaining shares authorized for repurchase.

~~Table of Contents~~

The following table presents a month-to-month summary of the stock purchase activity in the fourth quarter of fiscal ~~2010:~~2011:

Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

December 27, 2009 to January 23, 2010 339,200 $ 26.05 339,200 417,900
January 24, 2010 to February 27, 2010 370,000 $ 26.74 370,000 47,900
February 28, 2010 to April 3, 2010 72,000 $ 29.67 72,000 975,900



	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 2, 2011 to January 29, 2011	133,400		$	36.78	133,400	524,600
January 30, 2011 to March 5, 2011	517,624	¹	$	35.28	516,000	1,008,600
March 6, 2011 to April 2, 2011	347,700		$	35.10	347,700	660,900

See Note 12 of our Notes to Consolidated Financial Statements for more information regarding our stock repurchase programs.

¹ Includes 1,624 shares that were tendered to us in satisfaction of tax withholding obligations upon the vesting of restricted stock granted under our employee stock plans.

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ITEMITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA

The following selected financial information has been derived from our consolidated financial statements. The information set forth below is not necessarily indicative of results of future operations and should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and notes thereto included in Item 8 of this Form 10-K in order to fully understand factors that may affect the comparability of the information presented below.

Fiscal Year Ended March 31,
2006 1 2007 1,2 2008 1,2,3 2009 1,2,4,5 2010 1,2,4,6
($ in thousands, except per share data)
STATEMENT OF OPERATIONS DATA:
Net revenues $ 629,725 $ 676,514 $ 747,935 $ 674,590 $ 613,837
Operating profit $ 99,851 $ 84,677 $ 115,166 $ 61,461 $ 97,635
Operating margin 15.9 % 12.5 % 15.4 % 9.1 % 15.9 %
Income from continuing operations $ 102,043 $ 88,766 $ 121,020 $ 57,917 $ 100,740
Income from continuing operations, net of tax $ 75,511 $ 67,267 $ 92,012 $ 45,342 $ 76,453
Basic earnings per share - continuing operations $ 1.60 $ 1.42 $ 1.91 $ 0.93 $ 1.58
Diluted earnings per share - continuing operations $ 1.55 $ 1.40 $ 1.87 $ 0.93 $ 1.55
Income (loss) on discontinued operations, net of tax $ 5,639 $ (17,124 ) $ (23,617 ) $ (110,241 ) $ (19,075 )
Cash dividends declared per common share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20
Shares used in basic per share calculations 47,120 47,361 48,232 48,589 48,504
Shares used in diluted per share calculations 48,788 48,020 49,090 48,947 49,331

BALANCE SHEET DATA:
Cash, cash equivalents, and short-term investments $ 76,732 $ 103,365 $ 163,091 $ 218,180 $ 369,192
Total assets $ 612,249 $ 651,304 $ 741,393 $ 633,120 $ 655,351
Long-term obligations $ 1,453 $ 696 $ 14,989 $ 13,698 $ 13,850
Total stockholders' equity $ 435,621 $ 496,807 $ 578,620 $ 525,367 $ 571,334

OTHER DATA:
Cash provided from operating activities $ 78,348 $ 73,048 $ 102,900 $ 99,150 $ 143,729



	Fiscal Year Ended March 31,
	2011 ²			2010 ^1,2,5			2009 ^1,2,4			2008 ^1,3			2007 ¹
	($ in thousands, except per share data)
STATEMENT OF OPERATIONS DATA:
Net revenues	$	683,602		$	613,837		$	674,590		$	747,935		$	676,514
Operating income	$	140,712		$	97,635		$	61,461		$	115,166		$	84,677
Operating margin	20.6		%	15.9		%	9.1		%	15.4		%	12.5		%
Income from continuing operations	$	140,656		$	100,740		$	57,917		$	121,020		$	88,766
Income from continuing operations, net of tax	$	109,243		$	76,453		$	45,342		$	92,012		$	67,267
Basic earnings per share - continuing operations	$	2.29		$	1.58		$	0.93		$	1.91		$	1.42
Diluted earnings per share - continuing operations	$	2.21		$	1.55		$	0.93		$	1.87		$	1.40
Loss on discontinued operations, net of tax	$	—		$	(19,075	)	$	(110,241	)	$	(23,617	)	$	(17,124	)
Cash dividends declared per common share	$	0.20		$	0.20		$	0.20		$	0.20		$	0.20
Shares used in basic per share calculations	47,713			48,504			48,589			48,232			47,361
Shares used in diluted per share calculations	49,344			49,331			48,947			49,090			48,020
BALANCE SHEET DATA:
Cash, cash equivalents, and short-term investments	$	429,956		$	369,192		$	218,180		$	163,091		$	103,365
Total assets	$	744,647		$	655,351		$	633,120		$	741,393		$	651,304
Long-term obligations	$	12,667		$	13,850		$	13,698		$	14,989		$	696
Total stockholders' equity	$	634,852		$	571,334		$	525,367		$	578,620		$	496,807
OTHER DATA:
Cash provided from operating activities	$	158,232		$	143,729		$	99,150		$	102,900		$	73,048

On December 1, 2009, we completed the sale of Altec Lansing, our AEG segment, and, therefore, its results are no longer included in continuing operations for all periods presented. Accordingly, we have classified the AEG operating results, including the loss on sale, as discontinued operations in the Consolidated statement of operations for all periods presented. See Note 4 of the Consolidated Financial Statements and related notes, included elsewhere, herein.

We adopted new accounting principles for share-based payments beginning in fiscal 2007; as a result, $16.1 million, $15.0 million, $14.8 million, and $13.7 million in stock-based compensation expense has been included in our income from continuing operations for the years ended March 31, 2007, 2008, 2009 and 2010, respectively. See Note 12 of the Consolidated Financial Statements and related notes, included elsewhere, herein.

In the first quarter of fiscal 2008, we adopted new accounting principles for recognizing and measuring uncertain tax positions; as a result, the liability for uncertain tax provisions not expected to be paid within the next twelve months of $13.5 million was reclassified to long-term income taxes payable. See Note 15 of the Consolidated Financial Statements and related notes, included elsewhere, herein.

~~Table of Contents~~²

During fiscal 2009, we announced several restructuring plans which included reductions in force including the planned closure of our Suzhou, China Bluetooth manufacturing facility in fiscal March 31, 2010. As a result of these activities, $11.0 million in restructuring and other related charges has been included in our consolidated income from continuing operations for the year ended March 31, 2009. In fiscal 2010, we recorded an additional $1.9 million of Restructuring and other related charges consisting of $0.8 million of severance and benefits and $1.1 million of non-cash charges including $0.7 million for the acceleration of depreciation on building and equipment associated with research and development and administrative functions due to the change in the assets’ useful lives as a result of the assets being taken out of service ~~prio r~~prior to their original service period and $0.4 million of additional loss on Assets held for sale. In addition, in fiscal 2010, we recorded non-cash charges of $5.2 million for accelerated depreciation related to the building and equipment associated with manufacturing operations which is included in Cost of revenues. There were no charges in fiscal 2011; however, we completed the sale of our Suzhou facility, which was classified as Assets held for sale, resulting in an immaterial net gain which was recorded in Restructuring and other related charges. See Note 10 of the Consolidated Financial Statements and related notes, included elsewhere, herein.

In the first quarter of fiscal 2008, we adopted new accounting principles for recognizing and measuring uncertain tax positions; as a result, the liability for uncertain tax provisions not expected to be paid within the next twelve months of $13.5 million was reclassified to long-term income taxes payable. See Note 16 of the Consolidated Financial Statements and related notes, included elsewhere, herein.

⁴

As originally reported in fiscal 2009, potentially dilutive common shares attributable to employee stock plans diluted shares were excluded from the diluted share calculation as they would have been anti-dilutive and would have reduced the net loss per share however, as a result of reporting our AEG segment as discontinued operations, the anti-dilution of these potentially dilutive common shares is now based on income from continuing operations as compared to net income (loss) and are now included in the shares used in diluted per share calculation.

6
⁵	Fiscal year 2010 consisted of 53 weeks. All other fiscal years presented consisted of 52 weeks.

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ITEMITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and related notes thereto included elsewhere in this report. This discussion contains forward-looking statements. Please see the "Cautionary Statement" and "Risk Factors" above for discussions of the uncertainties, risks, and assumptions associated with these statements. Our fiscal year-end financial reporting periods are a 52 or 53 week year ending on the Saturday closest to March 31^st. Fiscal year 2011 had 52 weeks and ended on April 2, 2011. Fiscal year 2010 had 53 weeks, with the extra week occurring in the fourth quarter of the year, and ended on April 3, ~~2010.~~2010. Fiscal year 2009 had 52 weeks and ended on March 28, ~~2009. Fiscal year 2008 had 52 weeks and ended on March 29, 2008.~~2009. Except as noted, financial results are for continuing ~~operations.~~operations; Altec Lansing, our former AEG segment, was sold effective December 1, 2009 and is reported as discontinued ~~operations~~operations.

OVERVIEW

We are a leading worldwide designer, manufacturer, and marketer of lightweight communications headsets, telephone headset systems, and accessories for the business and consumer markets under the Plantronics brand. In addition, we manufacture and market, under our Clarity brand, specialty telephone products, such as telephones for the hearing impaired, and other related products for people with special communication needs.

We ship a broad range of products to 70approximately 65 countries through a worldwide network of distributors, retailers, wireless carriers, original equipment manufacturers (“OEMs”), and telephony service providers. We have well-developed distribution channels in North America, Europe, Australia and New Zealand, where use of our products is widespread. Our distribution channels in other regions of the world are less mature, and, while we primarily serve the contact center markets in those regions, we ~~are expanding~~continue to expand into the office, mobile and entertainment, digital audio, and specialty telephone markets in those regions and additional international locations.

On December 1, 2009, we sold Altec Lansing, our AEG business segment. We have classified the AEG operating results, including the loss on sale of AEG, as discontinued operations for all periods ~~presented.~~presented and we now operate as one segment.

Consolidated net revenues in fiscal ~~2010~~2011 were ~~$613.8~~$683.6 million, which is ~~a decrease~~an increase of 9%11.4% from fiscal ~~2009~~2010 net revenues of ~~$674.6~~$613.8 million. The year-over-year ~~decrease~~increase was ~~primarily attributable to the continuing effects from the global recession which resulted in decreased~~driven by increased demand for ~~our products particularly~~headsets designed for Unified Communications ("UC") together with higher sales volumes of our ~~Mobile and~~ Office and Contact Center ~~(“OCC”~~("OCC") products ~~in the first half of fiscal 2010. Additionally, the first half of fiscal 2009 included a benefit in mobile~~ ~~Bluetooth~~ headsets revenues from demand attributable to hands-free driving legislation being enforced in the states of California and Washington beginning July 1, 2009. This decline from fiscal 2009 was offset in part by increased revenue from a partial recovery of the global recession in the later part of fiscal 2010, an improved unit mix of revenues from higher price-point products and some benefit from new hands-free driving legislation being enforced in Canada and Europe. The decrease of $25.3 million in OCC product revenues in fiscal 2010 is due to lower volumes as a result of ~~weaker global~~a stronger overall economic ~~conditions.~~environment.

We had income from continuing operations, net of tax, of $109.2 million in fiscal 2011 as compared to $76.5 million in fiscal 2010, ~~as compared to $45.3 million in fiscal 2009,~~ an increase of ~~$31.1~~$32.8 million, due primarily to increased net revenues and higher margins due to ~~improved~~a stronger overall product mix driven by increased OCC net revenues as OCC products generally have higher margins along with a full year effect of outsourcing our Bluetooth product manufacturing in the second quarter of fiscal 2010 offset in part by an increase in operating expenses as a result of ~~outsourcing~~ our ~~Bluetooth~~investment in UC. ~~product manufacturing~~

UC is widely expected to increase the adoption and use of headsets in enterprise applications. Headsets help to enable voice to be delivered naturally in the ~~current year together with other cost reductions which improved our gross margin, and overall reduced operating expenses from restructuring actions taken in the prior year in an effort~~UC environment. As UC is adopted by enterprises to reduce ~~our cost structure~~costs and ~~adapt~~improve collaboration, headsets are expected to be an important part of the ~~current economic conditions.~~UC environment.

In the Mobile market, particularly for consumer applications, margins are typically lower than for our enterprise applications due to the level of competition and pricing pressures. Our strategy for improving the profitability of mobile consumer products is to differentiate our products from our competitors and to provide compelling solutions under our brand with regard to features, design, ease of use and performance. ~~Also, to further improve~~ ~~Bluetooth~~ ~~profitability, we outsourced manufacturing of our~~ ~~Bluetooth~~ ~~products to an existing supplier in China and, as a result, closed our Suzhou, China manufacturing operations in the second quarter of fiscal 2010.~~

Unified Communications (“UC”) is widely expected to increase the adoption and use of headsets in enterprise applications. Headsets enable voice to be delivered naturally in UC systems. As UC is adopted by enterprises to reduce costs and improve collaboration, headsets are expected to be an important part of the UC system.

~~Table of Contents~~

Throughout fiscal ~~2010,~~2011, we remained focused on our long-term strategy to ~~capitalize~~invest in UC as a key long-term driver of revenue and profit growth, maintain profitability in our consumer Bluetooth products and earn a return on invested capital in excess of the ~~opportunities in the OCC and Mobile markets and be well-positioned for UC.~~cost of capital. While staying focused on our long-term strategy, we ~~also broadly reduced spending in light of the global recession~~continued to ~~react~~distribute capital to the impact on our market and near-term revenue potential over the course of the year. Our revenues recently rebounded from the low we experienced in the March 2009 quarter and, as a result, some new initiatives were approved in lightstockholders through repurchases of our ~~improved financial position.~~common stock, and, subsequent to our fiscal year end, on May 2, 2011, our Board of Directors authorized the repurchase of up to 7,000,000 shares of our outstanding common stock.

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Looking forward into fiscal 2012, we continue to believe that UC is a key long-term driver of revenue and profit growth. In fiscal 2011, we introduced new products and generated $53 million in revenues from our UC product portfolio. We continue to focus on innovative product development, including the use of software and services as part of our products. Our investment also includes growing our sales force and increasing marketing and other support costs as we expand our key strategic partnerships to market UC products. Our goal is to be the world leader in audio solutions for the UC market and we feel we are ~~focused on the following key corporate goals to maximize long-term shareholder value:~~well positioned as we enter fiscal 2012 with a strong UC product portfolio.

~~Invest for UC leadership and a high return on investment.~~ We believe that UC is a key long-term driver of revenue and profit growth. We will focus on innovative product development, including the use of software as part of our products, growing our sales team, and establishing key strategic partnerships to market UC products. Our goal is to be the world leader in audio solutions for the UC market.

~~Maintain profitability in consumer Bluetooth products.~~ ~~In fiscal 2010, we were able to improve~~ ~~Bluetooth~~ ~~profitability and to gain market share. We also significantly reduced assets employed in the~~ ~~Bluetooth~~ business through the manufacturing outsourcing model and inventory management. Our goal in fiscal 2011 is to maintain profitability despite the strong competitive environment and optimize assets deployed as a result of opportunities within the ~~Bluetooth~~ ~~market.~~

~~Earn a return on invested capital in excess of the cost of capital.~~ As a result of our strategic initiatives we executed in fiscal 2010, we significantly improved asset efficiency. For example, our capital expenditures decreased by over 70% from fiscal 2009, inventories were reduced by approximately $49.0 million and inventory turns increased to 4.2 as of March 31, 2010 from 3.1 as of March 31, 2009. In the second half of fiscal 2010, we experienced growth in our revenues over the same periods in the prior year and, in fiscal 2011, we will continue to focus on growing our profits on a leaner asset base.

We intend for the following discussion of our financial condition and res~~ults~~and results of operations to provide information that will assist in understanding our financial statements and therefore, this discussion should be read in conjunction with the financial statements and accompanying notes.

~~Table of Contents~~

~~ANNUAL~~ RESULTS OF OPERATIONS

The following tables set forth, for the periods indicated, the consolidated statements of operations data. The financial information and the ensuing discussion should be read in conjunction with the accompanying consolidated financial statements and notes thereto. Except as noted, financial results are for continuing operations. Altec Lansing, our former AEG segment, was sold effective December 1, 2009. We have classified the AEG operating results as discontinued operations in the Consolidated statement of operations for all periods presented.

(in thousands) Fiscal Year Ended March 31,
2008 2009 2010

Net revenues $ 747,935 100.0 % $ 674,590 100.0 % $ 613,837 100.0 %
Cost of revenues 403,863 54.0 % 382,659 56.7 % 312,767 51.0 %
Gross profit 344,072 46.0 % 291,931 43.3 % 301,070 49.0 %

Operating expense:
Research, development and engineering 65,733 8.8 % 63,840 9.5 % 57,784 9.4 %
Selling, general and administrative 163,173 21.8 % 155,678 23.1 % 143,784 23.4 %
Restructuring and other related charges - 0.0 % 10,952 1.6 % 1,867 0.3 %
Total operating expenses 228,906 30.6 % 230,470 34.2 % 203,435 33.1 %

Operating income 115,166 15.4 % 61,461 9.1 % 97,635 15.9 %

Interest and other income (expense), net 5,854 0.8 % (3,544 ) (0.5 )% 3,105 0.5 %
Income from continuing operations before income taxes 121,020 16.2 % 57,917 8.6 % 100,740 16.4 %
Income tax expense from continuing operations 29,008 3.9 % 12,575 1.9 % 24,287 4.0 %
Income from continuing operations, net of tax 92,012 12.3 % 45,342 6.7 % 76,453 12.4 %
Discontinued operations:
Loss from operations of discontinued AEG segment (including loss on sale) (35,783 ) (4.8 )% (142,633 ) (21.1 )% (30,468 ) (5.0 )%
Income tax benefit on discontinued operations (12,166 ) (1.6 )% (32,392 ) (4.8 )% (11,393 ) (1.9 )%
Loss on discontinued operations (23,617 ) (3.2 )% (110,241 ) (16.3 )% (19,075 ) (3.1 )%
Net income (loss) $ 68,395 9.1 % $ (64,899 ) (9.6 )% $ 57,378 9.3 %



(in thousands)	Fiscal Year Ended March 31,
	2011					2010					2009
Net revenues	$	683,602		100.0	%	$	613,837		100.0	%	$	674,590		100.0	%
Cost of revenues	321,846			47.1	%	312,767			51.0	%	382,659			56.7	%
Gross profit	361,756			52.9	%	301,070			49.0	%	291,931			43.3	%
Operating expense:
Research, development and engineering	63,183			9.2	%	57,784			9.4	%	63,840			9.5	%
Selling, general and administrative	163,389			23.9	%	143,784			23.4	%	155,678			23.1	%
Gain from litigation settlement	(5,100		)	(0.7	)%	—			—		—			—
Restructuring and other related charges	(428		)	(0.1	)%	1,867			0.3	%	10,952			1.6	%
Total operating expenses	221,044			32.3	%	203,435			33.1	%	230,470			34.2	%
Operating income	140,712			20.6	%	97,635			15.9	%	61,461			9.1	%
Interest and other income (expense), net	(56		)	—		3,105			0.5	%	(3,544		)	(0.5	)%
Income from continuing operations before income taxes	140,656			20.6	%	100,740			16.4	%	57,917			8.6	%
Income tax expense from continuing operations	31,413			4.6	%	24,287			4.0	%	12,575			1.9	%
Income from continuing operations, net of tax	109,243			16.0	%	76,453			12.4	%	45,342			6.7	%
Discontinued operations:
Loss from operations of discontinued AEG segment (including loss on sale)	—			—		(30,468		)	(5.0	)%	(142,633		)	(21.1	)%
Income tax benefit on discontinued operations	—			—		(11,393		)	(1.9	)%	(32,392		)	(4.8	)%
Loss on discontinued operations	—			—		(19,075		)	(3.1	)%	(110,241		)	(16.3	)%
Net income (loss)	$	109,243		16.0	%	$	57,378		9.3	%	$	(64,899	)	(9.6	)%

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Net Revenues


	Fiscal Year Ended									Fiscal Year Ended									Fiscal Year Ended									Fiscal Year Ended
(in thousands)	March 31, 2008		March 31, 2009		Increase (Decrease)					March 31, 2009		March 31, 2010		Increase (Decrease)					March 31, 2011		March 31, 2010		Increase (Decrease)					March 31, 2010		March 31, 2009		Increase (Decrease)

Net revenues:
Office and Contact Center	$	519,958	$	429,669	$	(90,289	)	(17.4	)%	$	429,669	$	404,397	$	(25,272	)	(5.9	)%	$	490,472	$	404,397	$	86,075		21.3	%	$	404,397	$	429,669	$	(25,272	)	(5.9	)%
Mobile		171,880		187,419		15,539		9.0	%		187,419		149,756		(37,663	)	(20.1	)%	137,530		149,756		(12,226		)	(8.2	)%	149,756		187,419		(37,663		)	(20.1	)%
Gaming and Computer Audio		33,612		34,052		440		1.3	%		34,052		39,260		5,208		15.3	%	36,736		39,260		(2,524		)	(6.4	)%	39,260		34,052		5,208			15.3	%
Clarity		22,485		23,450		965		4.3	%		23,450		20,424		(3,026	)	(12.9	)%	18,864		20,424		(1,560		)	(7.6	)%	20,424		23,450		(3,026		)	(12.9	)%
Total net revenues	$	747,935	$	674,590	$	(73,345	)	(9.8	)%	$	674,590	$	613,837	$	(60,753	)	(9.0	)%	$	683,602	$	613,837	$	69,765		11.4	%	$	613,837	$	674,590	$	(60,753	)	(9.0	)%

Our consolidated net revenues increased in fiscal 2011 as compared to fiscal 2010 driven by growth in OCC product revenues as a result of improved global economic conditions and growth in demand for UC. While we experienced foreign exchange fluctuations in our net revenues during the first half of the fiscal year, the overall foreign exchange impact for the entire fiscal year was not material.

Our consolidated net revenues decreased in fiscal 2010 as compared to fiscal 2009 primarily in our Mobile and OCC product revenues as a result of global economic weakness due to the global recession especially in the first half of fiscal 2010 in comparison to the prior year. While we experienced foreign exchange fluctuations in our net revenues during the first half of ~~the~~ fiscal ~~year, the overall foreign exchange impact for the entire fiscal year was not material. Fiscal~~ 2010, ~~contained 53 weeks whereas fiscal 2009 contained 52 weeks, which impacts the comparison between periods.~~

Our consolidated net revenues decreased in fiscal 2009 as compared to fiscal 2008 primarily due to the impact of global economic weakness due to the global recession. This decrease was primarily due to lower OCC product revenues driven by a weakened economy offset in part by an increase in sales of Mobile headsets due to an improved product portfolio and demand attributable to hands-free driving laws going into effect in the states of California and Washington in the U.S. in fiscal 2009 and an improved product portfolio. While we experienced significant foreign exchange fluctuations on our net revenues during the first half of fiscal 2009, the overall foreign exchange impact for the entire fiscal year was not material.

Net revenues may vary due to the timing of the introduction of new products, ~~seasonality,~~ discounts and other incentives and channel mix. In addition, we typically experience seasonality in our quarterly revenues which occurs in the third quarter of our fiscal year. Our OCC products represent our largest source of revenues while our Mobile products represent our largest unit volumes.

Primary fluctuations in the net revenues in fiscal 2011 compared to fiscal 2010 were as follows:

OCC product net revenues increased $86.1 million as a result of higher volumes due to improved global economic conditions and growth in demand for UC products.

Mobile net revenues decreased $12.2 million mostly due to overall weakness in the product category which resulted in a lower unit volume of sales. We believe we have maintained our share of the total global market, although gains achieved internationally were partially offset by a reduction in U.S. market share.

Primary fluctuations in the net revenues in fiscal 2010 compared to fiscal 2009 were as follows:

Mobile product net revenues decreased by $37.7 million due primarily ~~due~~ to lower volumes as a result of the global recession along with the benefit realized ~~in fiscal 2009 from~~ ~~Bluetooth~~ ~~headset revenues attributable to hands-free driving legislation enacted in the states of California and Washington in the U.S. in fiscal 2009.~~

~~OCC product net revenues decreased by $25.3 million as a result of lower volumes due to continued weakness in the economic conditions as a result of the global recession.~~

~~Gaming and Computer Audio increased by $5.2 million due to higher sales of UC products and the overall strength of the product portfolio.~~

~~Clarity decreased by $3.0 million primarily due to lower purchases under state government programs as a result of the impact of the recession on state budgets and lower OEM sales in Europe.~~

~~Primary fluctuations in the net revenues~~ in fiscal 2009 ~~compared~~from Bluetooth headset revenues attributable to hands-free driving legislation enacted in the states of California and Washington in the U.S. in fiscal ~~2008 were~~2009.

OCC product net revenues decreased by $25.3 million as ~~follows:~~a result of lower volumes due to weakness in economic conditions as a result of the global recession.

~~OCC product net revenues decreased by $90.3 million as a result of weak economic conditions.~~

Gaming and Computer Audio net revenues increased by $5.2 million due to higher sales of UC products and the overall strength of the product portfolio.

Mobile product net revenues increased by $15.5 million primarily due to increased retail placements as a result of an improved product portfolio as well as demand attributable to hands-free driving legislation enacted in the states of California and Washington in the U.S. in fiscal 2009.

Clarity net revenues decreased by $3.0 million due primarily to lower purchases under state government programs as a result of the impact of the recession on state budgets and lower OEM sales in Europe.

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Geographical Information


	Fiscal Year Ended									Fiscal Year Ended									Fiscal Year Ended											Fiscal Year Ended
(in thousands)	March 31, 2008		March 31, 2009		Increase (Decrease)					March 31, 2009		March 31, 2010		Increase (Decrease)					March 31, 2011			March 31, 2010			Increase (Decrease)					March 31, 2010			March 31, 2009			Increase (Decrease)

Net revenues:
United States	$	461,662	$	424,290	$	(37,372	)	(8.1	)%	$	424,290	$	378,119	$	(46,171	)	(10.9	)%	$	400,292		$	378,119		$	22,173		5.9	%	$	378,119		$	424,290		$	(46,171	)	(10.9	)%

As a percentage of net revenues																			58.6		%	61.6		%	(3.0		)	ppt.		61.6		%	62.9		%	(1.3		)	ppt.
Europe, Middle East and Africa		188,429		162,697		(25,732	)	(13.7	)%		162,697		148,070		(14,627	)	(9.0	)%	169,521			148,070			21,451			14.5	%	148,070			162,697			(14,627		)	(9.0	)%
Asia Pacific		49,603		41,846		(7,757	)	(15.6	)%		41,846		46,494		4,648		11.1	%	62,697			46,494			16,203			34.8	%	46,494			41,846			4,648			11.1	%
Americas, excluding United States		48,241		45,757		(2,484	)	(5.1	)%		45,757		41,154		(4,603	)	(10.1	)%	51,092			41,154			9,938			24.1	%	41,154			45,757			(4,603		)	(10.1	)%
Total international net revenues		286,273		250,300		(35,973	)	(12.6	)%		250,300		235,718		(14,582	)	(5.8	)%	283,310			235,718			47,592			20.2	%	235,718			250,300			(14,582		)	(5.8	)%

As a percentage of net revenues																			41.4		%	38.4		%	3.0			ppt.		38.4		%	37.1		%	1.3			ppt.
Total consolidated net revenues	$	747,935	$	674,590	$	(73,345	)	(9.8	)%	$	674,590	$	613,837	$	(60,753	)	(9.0	)%	$	683,602		$	613,837		$	69,765		11.4	%	$	613,837		$	674,590		$	(60,753	)	(9.0	)%

Consolidated U.S. net revenues, as a percentage of total net revenues, decreased by ~~1% from 63%~~3.0 percentage points to 59% in fiscal ~~2009 to~~ 2011 from 62% in fiscal 2010 mostly due to the weakness in the Mobile product category. Consolidated international net revenues, as a percentage of total net revenues, increased to 41% in fiscal 2011 from 38% in fiscal 2010. The increase in absolute dollars in the U.S. revenues was a result of increased OCC revenues due to improved global economic conditions and growth in demand for UC. The increase in absolute dollars in international revenues was also due to increased OCC revenues along with an increase in Mobile revenues as we gained market share in the overall region.

Consolidated U.S. net revenues, as a percentage of total net revenues, decreased by 1.0 percentage point to 62% in fiscal 2010 from 63% in fiscal 2009 due mostly to the Bluetooth product ~~demand~~ attributable to hands-free driving legislation enacted in ~~several~~the states of California and Washington in the U.S. in fiscal 2009. Accordingly, consolidated international net revenues, as a percentage of total net revenues, increased to 38% in fiscal 2010 from 37% in fiscal ~~2009 to 38%~~2009. The decrease in ~~fiscal 2010.~~

~~In comparison to fiscal 2008, fiscal 2009 consolidated U.S. net revenues, as a percentage of total net revenues, increased 1% mostly due to the~~ ~~Bluetooth~~ ~~product demand attributable to hands-free driving legislation enacted~~absolute dollars in ~~several states in~~both the U.S. ~~in fiscal 2009. Consolidated~~and international ~~net~~ revenues aswas a ~~percentage~~result of ~~total net revenues, decreased from 38% in fiscal 2008 to 37% in fiscal 2009.~~the global economic recession.

Cost of Revenues and Gross Profit

Cost of revenues consists primarily of direct manufacturing and contract manufacturer costs, including material and direct labor, our operations management team and indirect labor such as supervisors and warehouse workers, freight expense, warranty expense, depreciation, royalties, reserves for excess and obsolete inventory, and an allocation of overhead expenses, including facilities and IT costs.


	Fiscal Year Ended												Fiscal Year Ended												Fiscal Year Ended										Fiscal Year Ended
(in thousands)	March 31, 2008			March 31, 2009			Increase (Decrease)						March 31, 2009			March 31, 2010			Increase (Decrease)						March 31, 2011			March 31, 2010			Increase (Decrease)				March 31, 2010			March 31, 2009			Increase (Decrease)

Net revenues	$	747,935		$	674,590		$	(73,345	)		(9.8	)%	$	674,590		$	613,837		$	(60,753	)		(9.0	)%	$	683,602		$	613,837		$	69,765	11.4	%	$	613,837		$	674,590		$	(60,753	)	(9.0	)%
Cost of revenues		403,863			382,659			(21,204	)		(5.3	)%		382,659			312,767			(69,892	)		(18.3	)%	321,846			312,767			9,079		2.9	%	312,767			382,659			(69,892		)	(18.3	)%
Consolidated gross profit	$	344,072		$	291,931		$	(52,141	)		(15.2	)%	$	291,931		$	301,070		$	9,139			3.1	%	$	361,756		$	301,070		$	60,686	20.2	%	$	301,070		$	291,931		$	9,139		3.1	%
Consolidated gross profit %		46.0	%		43.3	%		(2.7	)	ppt.				43.3	%		49.0	%		5.7		ppt.			52.9		%	49.0		%	3.9		ppt.		49.0		%	43.3		%	5.7			ppt.

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Customer Programs

56We record reductions to revenue for estimated commitments related to cooperative advertising, marketing development funds, volume rebates and special pricing programs. These estimated commitments are based on actual expenses incurred during the period, estimates for what is due to resellers for estimated credits earned during the period, any adjustments for credits based on actual activity, and estimates for any increased promotional programs or decreased pricing on inventory in the channel. If the actual payments exceed management's estimates, this could result in an adverse impact on our revenues.

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Inventory and Related Reserves

Inventories are ~~stated~~valued at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Costs such as idle facility expense, double freight, and re-handling costs are accounted for as current-period charges. ~~Additionally, the Company allocates fixed~~Fixed production ~~overheads~~overhead is allocated to the costs of conversion based on the normal capacity of the production facilities. All shipping and handling costs incurred in connection with the sale of products are included in the ~~cost~~Cost of revenues.

~~The Company’s~~Our products ~~utilize~~require long-lead time parts ~~which are~~ available from a limited ~~set~~number of ~~vendors. The combined effects of variability of demand among the customer base~~vendors and, significant long-lead time of single sourced materials has historically contributed to significant inventory write-downs, particularly in inventory for consumer products. For the Company’s commercial products, long life-cycles periodically necessitateoccasionally, last-time buys of raw materials ~~which may be used over the course~~for products with long lifecycles. The effects of ~~several years. The Company routinely reviews~~demand variability, long-lead times and last-time buys have historically contributed to inventory for usage potential, including fulfillment of customer warranty obligations and spare part requirements. If the Company believes that demand no longer allows the Company to sell inventory above cost or at all, management writes down that inventory to market or writes-off the excess and obsolete inventory. Write-downs are determined by reviewing the Company’swrite-downs. Our demand forecast ~~and by determining what inventory, if any, is not saleable. The Company’s demand forecast projects~~considers projected future shipments, ~~using historical rates and takes into account~~ market conditions, inventory on hand, purchase commitments, product development plans and product life expectancy, inventory on consignment and other competitive factors. If the ~~Company’s~~ demand forecast is greater than actual demand and we believe we can no longer sell our inventory above cost or at all, we write that inventory down to market value or write-off the ~~Company fails~~excess or obsolete inventory. We routinely review inventory for usage potential, including fulfillment of customer warranty obligations and spare part requirements; however, failure to ~~reduce its~~accurately forecast demand or manage our supply chain accordingly it could ~~be required to~~result in the write down of additional inventory which would ~~have a negative~~negatively impact ~~on the Company’s~~our gross profit.

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~~At the point of inventory write-down, a new, lower-cost basis for that~~Once inventory is ~~established and~~written down, subsequent changes in facts and circumstances do not result in the restoration to the original cost or an increase in ~~that newly established cost~~the new, lower-cost basis.

Product WarrantyObligations

We provide for product warranties in accordance with the underlying contractual terms given to the customer or end user of the product. The contractual terms vary depending upon the geographic region in which the customer is located, the type of product sold, and other conditions, which affect or limit the customer’s rights to return product under warranty. Where specific warranty return rights are given to customers, we accrue for the estimated cost of those warranties at the time revenue is recognized. Generally, warranties start at the delivery date to the customer or end user and continue for one or two years. Where specific warranty return rights are not given to the customers but where the customers are granted limited rights of return or discounts in lieu of warranty, we record these rights of return or discounts as adjustments to revenue. Factors that affect the warranty obligation include sales terms, which obligate us to provide warranty, product failure rates, estimated return rates, material usage, and service delivery costs incurred in correcting product failures. We assess the adequacy of the recorded warranty obligation quarterly and make adjustments to the obligation based on actual experience and changes in estimated future return rates. If our estimates are less than the actual costs of providing warranty related services, we could be required to record additional warranty reserves, which would have a negative impact on our gross profit.

Fair Value

Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As the basis for considering such assumptions, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require us to develop our own assumptions. This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value, including our marketable securities and foreign currency contracts.

Our cash and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using inputs such as quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include cash, money market funds and U.S. Treasury Bills. Such instruments are generally classified within Level 1 of the fair value hierarchy.

The types of instruments valued based on other observable inputs include Government Agency Securities, Commercial Paper, U.S. Corporate Bonds and CDs. Such instruments are generally classified within Level 2 of the fair value hierarchy.

The principal market where we execute our foreign currency contracts is the retail market in an over-the-counter environment with a relatively high level of price transparency. Our counterparties are large money center banks. Our foreign currency contracts valuation inputs are based on quoted prices and quoted pricing intervals from public data sources. These contracts are typically classified within Level 2 of the fair value hierarchy.

Income Taxes

We are subject to income taxes both in the U.S. as well as in several foreign jurisdictions. We must make certain estimates and judgments in determining income tax expense for the financial statements. These estimates occur in the calculation of tax benefits and deductions, tax credits, and tax assets and liabilities which are generated from differences in the timing of when items are recognized for book purposes and when they are recognized for tax purposes.

We account for income taxes under an asset and liability approach that requires the expected future tax consequences of temporary differences between book and tax bases of assets and liabilities to be recognized as deferred tax assets and liabilities. Valuation allowances are established to reduce deferred tax assets when, based on available objective evidence, it is more likely than not that the benefit of such assets will not be realized.

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Goodwill and Intangibles

Goodwill and intangible assets with indefinite lives are not amortized. At least annually, in the fourth quarter of each fiscal year or more frequently if indicators of impairment exist, management performs a review to determine if the carrying values of goodwill and indefinite lived intangible assets are impaired.

Goodwill has been measured as the excess of the cost of acquisition over the amount assigned to tangible and identifiable intangible assets acquired less liabilities assumed. The identification and measurement of goodwill impairment involves the estimation of fair value at our reporting unit level. We determine our reporting units by assessing whether discrete financial information is available and if segment management regularly reviews the results of that component. Such impairment tests for goodwill include comparing the fair value of the reporting unit with its carrying value, including goodwill. The estimate of the fair value of the reporting unit is based on the best information available as of the date of the assessment which primarily incorporate management assumptions about expected future cash flows, discount rates, overall market growth and our percentage of that market and growth rates in terminal values, estimated costs and other factors, which utilize historical data, internal estimates, and, in some cases, outside data. If the carrying value of the reporting unit exceeds management’s estimate of fair value, goodwill may become impaired, and we may be required to record an impairment charge, which would negatively impact our operating results.

The fair value measurement of purchased intangible assets with indefinite lives involves the estimation of the fair value which is based on management assumptions about expected future cash flows, discount rates, growth rates, estimated costs and other factors which utilize historical data, internal estimates, and, in some cases, outside data. If the carrying value of the indefinite lived intangible asset exceeds management’s estimate of fair value, the asset may become impaired, and we may be required to record an impairment charge which would negatively impact our operating results.

Purchased intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets. Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such conditions may include an economic downturn or a change in the assessment of future operations. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the amount that the carrying value of the asset exceeds its fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. When testing long-lived assets for recoverability, we also review depreciation and/or amortization estimates and methods to assess whether the assets' remaining useful lives are still appropriate or should be revised.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-13, Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements (“ASU 2009-13”). ASU 2009-13 eliminates the residual method of allocation and requires the relative selling price method when allocating deliverables of a multiple-deliverable revenue arrangement. The determination of the selling price for each deliverable requires the use of a hierarchy designed to maximize the use of available objective evidence including VSOE, TPE, or ESP.

In October 2009, the FASB also issued ASU No. 2009-14, Software (Topic 985)-Certain Revenue Arrangements That Include Software Elements (“ASU 2009-14”). ASU 2009-14 excludes tangible products containing software and non-software components that function together to deliver the product's essential functionality, from the scope of ASC 605-985, Software-Revenue Recognition.

ASU 2009-13 and ASU 2009-14 are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and must be adopted in the same period using the same transition method. If adoption is elected in a period other than the beginning of a fiscal year, the amendments in these standards must be applied retrospectively to the beginning of the fiscal year. Full retrospective application of these amendments to prior fiscal years is optional. We implemented both ASU 2009-13 and ASU 2009-14 in the second quarter of fiscal 2011 with retrospective application to the beginning of fiscal 2011 for transactions that were initiated or materially modified during fiscal 2011. Implementation of these ASUs did not have a material impact on reported net revenues as compared to net revenues under previous guidance as we do not typically enter into multiple element arrangements. In addition, the new guidance did not change the units of accounting within sales arrangements and the elimination of the residual method for the allocation of arrangement consideration had no material impact on the amount and timing of reported net revenues. We do not believe that the effect of adopting these standards will have a material impact on future financial periods.

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Recently Issued Pronouncements

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs ("ASU 2011-04"), which amends ASC 820, Fair Value Measurement. ASU 2011-04 does not extend the use of fair value accounting, but provides guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP or International Financial Reporting Standards (“IFRSs”). ASU 2011-14 changes the wording used to describe many requirements in U.S. GAAP for for measuring fair value and for disclosing information about fair value measurements. Additionally, ASU 2011-14 clarifies the FASB's intent about the application of existing fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011 and is applied prospectively; therefore, we will adopt ASU 2011-04 in our fourth quarter of fiscal 2012. We do not expect the adoption of ASU 2011-04 to have a material impact on our consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discusses our exposure to market risk related to changes in interest rates and foreign currency exchange rates. This discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results could vary materially as a result of a number of factors including those set forth in "Risk Factors Affecting Future Operating Results."

INTEREST RATE AND MARKET RISK

We had cash and cash equivalents totaling $284.4 million at March 31, 2011 compared to $350.0 million at March 31, 2010. We had short-term investments totaling $145.6 million as of March 31, 2011 compared to $19.2 million at March 31, 2010. We had long-term investments of $39.3 million as of March 31, 2011 and no long-term investments as of March 31, 2010. Cash equivalents have a remaining maturity of three months or less at the date of purchase; short-term securities have a remaining maturity of greater than three months at the date of purchase and an effective maturity of less than one year; and long-term investments have effective maturities greater than one year, or we do not currently have the ability to liquidate the investment. As of March 31, 2010, all of our ARS portfolio was held in our name at one major financial institution and was concentrated primarily in student loans. The ARS were classified as short-term trading securities due to management’s intent to exercise the put option with UBS and the expectation that the ARS would be sold within twelve months. The ARS were sold at par value at the end of June 2010. As of March 31, 2011, our investments were composed of U.S. Treasury Bills, Government Agency Securities, Commercial Paper, U.S. Corporate Bonds and CDs.

Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements. A portion of our cash is managed by external managers within the guidelines of our investment policy. Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We typically invest in highly rated securities and our policy generally limits the amount of credit exposure to any one issuer. Our investment policy requires investments to be high credit quality, primarily rated A or A2, with the objective of minimizing the potential risk of principal loss. All highly liquid investments with initial maturities of three months or less at the date of purchase are classified as cash equivalents. We classify our investments as either short-term or long-term based on each instrument's underlying maturity date. All short-term investments have effective maturities less than 12 months, while all long-term investments have effective maturities greater than 12 months. We may sell our investments prior to their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management. We recognized no material realized or unrealized net gains or losses during the years ended March 31, 2011 and 2010.

Interest rates declined in the year ended March 31, 2011 compared to the prior year. During the year ended March 31, 2011, we generated no significant interest income from our portfolio of cash equivalents and investments. A hypothetical increase or decrease in our interest rates by 10 basis points would have a minimal impact on our interest income.

FOREIGN CURRENCY EXCHANGE RATE RISK

We are exposed to currency fluctuations, primarily in the Euro ("EUR"), Great Britain Pound ("GBP"), Australian Dollar ("AUD") and the Mexican Peso ("MX$"). We use a hedging strategy to diminish, and make more predictable, the effect of currency fluctuations. All of our hedging activities are entered into with large financial institutions, which we periodically evaluate for credit risks. We hedge our balance sheet exposure by hedging EUR, GBP and AUD denominated cash balances, receivables, and payables, and our economic exposure by hedging a portion of anticipated EUR and GBP denominated sales and our MX$ denominated expenditures. We can provide no assurance that our strategy will be successful in the future and that exchange rate fluctuations will not materially adversely affect our business.

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We experienced immaterial net foreign currency gains in the year ended March 31, 2011. Although we hedge a portion of our foreign currency exchange exposure, the weakening of certain foreign currencies, particularly the Euro and the Great Britain Pound in comparison to the U.S. Dollar ("USD"), could result in material foreign exchange losses in future periods.

Non-designated Hedges

We hedge our EUR, GBP and AUD denominated cash, receivables and payables balances by entering into foreign exchange forward contracts.

The table below presents the impact on the foreign exchange gain (loss) of a hypothetical 10% appreciation and a 10% depreciation of the USD against the forward currency contracts as of March 31, 2011 (in millions):



Currency - forward contracts	Position	USD Value of Net Foreign Exchange Contracts		Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange (Loss) From 10% Depreciation of USD
EUR	Sell Euro	$	25.5	$	2.6	$	(2.6	)
GBP	Sell GBP	6.4		0.6		(0.6		)
AUD	Sell AUD	$	3.5	$	0.4	$	(0.4	)
Net position		$	35.4	$	3.6	$	(3.6	)

Cash Flow Hedges

Approximately 41%, 38% and 37% of net revenue from continuing operations in fiscal 2011, 2010 and 2009, respectively, was derived from sales outside of the U.S., which were denominated predominantly in EUR and GBP in each of the fiscal years.

As of March 31, 2011, we had foreign currency call option contracts with notional amounts of approximately €52.7 million and £14.5 million denominated in EUR and GBP, respectively. As of March 31, 2011, we also had foreign currency put option contracts with notional amounts of approximately €52.7 million and £14.5 million denominated in EUR and GBP, respectively. Collectively, our option contracts hedge against a portion of our forecasted foreign currency denominated sales. If the USD is subjected to either a 10% appreciation or 10% depreciation versus these net exposed currency positions, we could incur a gain of $6.3 million or a loss of $7.9 million, respectively.

The table below presents the impact on the Black-Scholes valuation of our currency option contracts of a hypothetical 10% appreciation and a 10% depreciation of the USD against the indicated option contract type for cash flow hedges as of March 31, 2011(in millions):



Currency - option contracts	USD Value of Net Foreign Exchange Contracts			Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange (Loss) From 10% Depreciation of USD
Call options	$	(96.0	)	$	3.5	$	(7.1	)
Put options	89.2			2.8		(0.8		)
Net position	$	(6.8	)	$	6.3	$	(7.9	)

Collectively, our swap contracts hedge against a portion of our forecasted MS$ denominated expenditures. As of March 31, 2011, we had cross currency swap contracts with notional amounts of approximately MX$343.9 million.

The table below presents the impact on the valuation of our cross-currency swap contracts of a hypothetical 10% appreciation and a 10% depreciation of the USD as of March 31, 2011 (in millions):



Currency - cross-currency swap contracts	USD Value of Cross-Currency Swap Contracts		Foreign Exchange (Loss) From 10% Appreciation of USD			Foreign Exchange Gain From 10% Depreciation of USD
Position: Buy MX$	$	27.9	$	(2.6	)	$	3.1

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Plantronics, Inc.:

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of Plantronics, Inc. and its subsidiaries at April 2, 2011 and April 3, 2010, and the results of their operations and their cash flows for each of the three years in the period ended April 2, 2011 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule appearing under Item 15(a)(2)present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 2, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

San Jose, California

May 31, 2011

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PLANTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)



	March 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	284,375		$	349,961
Short-term investments	145,581			19,231
Accounts receivable, net	103,289			88,328
Inventory, net	56,473			70,518
Deferred income taxes	11,349			10,911
Other current assets	16,653			21,782
Assets held for sale	—			8,861
Total current assets	617,720			569,592
Long-term investments	39,332			—
Property, plant and equipment, net	70,622			65,700
Intangibles, net	856			3,449
Goodwill	14,005			14,005
Other assets	2,112			2,605
Total assets	$	744,647		$	655,351
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	33,995		$	23,779
Accrued liabilities	59,607			45,837
Total current liabilities	93,602			69,616
Deferred tax liability	3,526			551
Long-term income taxes payable	11,524			12,926
Other long-term liabilities	1,143			924
Total liabilities	109,795			84,017
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.01 par value per share; 1,000 shares authorized, no shares outstanding	—			—
Common stock, $0.01 par value per share; 100,000 shares authorized, 50,043 shares and 51,449 shares issued at 2011 and 2010, respectively	720			695
Additional paid-in capital	499,027			428,407
Accumulated other comprehensive income	1,473			6,272
Retained earnings	192,468			195,293
Total stockholders' equity before treasury stock	693,688			630,667
Less: Treasury stock (common: 1,728 and 2,579 shares at 2011 and 2010, respectively) at cost	(58,836		)	(59,333		)
Total stockholders' equity	634,852			571,334
Total liabilities and stockholders' equity	$	744,647		$	655,351

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)



	Fiscal Year Ended March 31,
	2011			2010			2009
Net revenues	$	683,602		$	613,837		$	674,590
Cost of revenues	321,846			312,767			382,659
Gross profit	361,756			301,070			291,931
Operating expenses:
Research, development and engineering	63,183			57,784			63,840
Selling, general and administrative	163,389			143,784			155,678
Gain from litigation settlement	(5,100		)	—			—
Restructuring and other related charges	(428		)	1,867			10,952
Total operating expenses	221,044			203,435			230,470
Operating income	140,712			97,635			61,461
Interest and other income (expense), net	(56		)	3,105			(3,544		)
Income from continuing operations before income taxes	140,656			100,740			57,917
Income tax expense from continuing operations	31,413			24,287			12,575
Income from continuing operations, net of tax	109,243			76,453			45,342
Discontinued operations:
Loss from operations of discontinued AEG segment (including loss on sale)	—			(30,468		)	(142,633		)
Income tax benefit on discontinued operations	—			(11,393		)	(32,392		)
Loss on discontinued operations, net of tax	—			(19,075		)	(110,241		)
Net income (loss)	$	109,243		$	57,378		$	(64,899	)

Earnings (loss) per common share:
Basic
Continuing operations	$	2.29		$	1.58		$	0.93
Discontinued operations	$	—		$	(0.39	)	$	(2.27	)
Net income (loss)	$	2.29		$	1.18		$	(1.34	)
Diluted
Continuing operations	$	2.21		$	1.55		$	0.93
Discontinued operations	$	—		$	(0.39	)	$	(2.25	)
Net income (loss)	$	2.21		$	1.16		$	(1.33	)

Shares used in basic per share calculations	47,713			48,504			48,589
Shares used in diluted per share calculations	49,344			49,331			48,947

Cash dividends declared per common share	$	0.20		$	0.20		$	0.20

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	Fiscal Year Ended March 31,
	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	109,243		$	57,378		$	(64,899	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	16,275			18,144			25,822
Stock-based compensation	15,873			14,577			15,742
Provision for (benefit from) doubtful accounts and sales allowances	(8		)	(243		)	2,698
Provision for excess and obsolete inventories	1,099			418			11,364
Benefit from deferred income taxes	(5,165		)	(12,449		)	(26,853		)
Income tax benefit associated with stock option exercises	6,195			3,669			1,025
Excess tax benefit from stock-based compensation	(5,747		)	(2,247		)	(592		)
Amortization of premium (accretion of purchase discounts) on investments, net	578			—			—
Impairment of goodwill and long-lived assets	—			25,194			117,464
Non-cash restructuring charges	—			6,261			581
Loss on sale of discontinued operations	—			611			—
Other operating activities	(5		)	384			358
Changes in assets and liabilities:
Accounts receivable, net	(15,086		)	388			50,706
Inventory, net	12,962			27,620			(5,358		)
Current and other assets	(2,280		)	2,868			(6,935		)
Accounts payable	10,216			(9,048		)	(15,069		)
Accrued liabilities	9,873			(1,001		)	(6,701		)
Income taxes	4,209			11,205			(203		)
Cash provided by operating activities	158,232			143,729			99,150
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of short-term investments	28,034			4,000			—
Proceeds from maturities of short-term investments	114,495			145,000			30,000
Purchase of short-term investments	(256,258		)	(84,990		)	(89,896		)
Proceeds from sales of long-term investments	664			750			—
Purchase of long-term investments	(48,870		)	—			—
Capital expenditures and other assets	(18,567		)	(6,262		)	(23,682		)
Proceeds from sale of property, plant and equipment and assets held for sale	9,066			277			—
Proceeds received from sale of AEG segment	1,625			9,121			—
Other investing activities	(100		)	—			406
Cash provided by (used for) investing activities	(169,911		)	67,896			(83,172		)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock including taxes paid related to net share settlement on equity awards	(105,716		)	(49,652		)	(17,817		)
Proceeds from sale of treasury stock	4,192			3,623			5,198
Proceeds from issuance of common stock	50,109			32,581			6,899
Payment of cash dividends	(9,703		)	(9,781		)	(9,787		)
Excess tax benefit from stock-based compensation	5,747			2,247			592
Cash used for financing activities	(55,371		)	(20,982		)	(14,915		)
Effect of exchange rate changes on cash and cash equivalents	1,464			1,125			(5,961		)
Net increase (decrease) in cash and cash equivalents	(65,586		)	191,768			(4,898		)
Cash and cash equivalents at beginning of year	349,961			158,193			163,091
Cash and cash equivalents at end of year	$	284,375		$	349,961		$	158,193
SUPPLEMENTAL DISCLOSURES
Cash paid for income taxes	$	29,180		$	11,663		$	12,519

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)



	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Retained			Treasury			Total Stockholders'
	Shares		Amount		Capital			Income (Loss)			Earnings			Stock			Equity
Balances at March 31, 2008	48,944		$	673	$	369,655		$	(3,581	)	$	608,849		$	(396,976	)	$	578,620
Net loss	—		—		—			—			(64,899		)	—			(64,899		)
Foreign currency translation adjustments	—		—		—			(2,606		)	—			—			(2,606		)
Unrealized gain on hedges, net of tax	—		—		—			12,179			—			—			12,179
Unrealized gain on long-term investments, net of tax	—		—		—			2,863			—			—			2,863
Comprehensive loss																	(52,463		)
Exercise of stock options	359		4		6,894			—			—			—			6,898
Issuance of restricted common stock	187		1		—			—			—			—			1
Repurchase of restricted common stock	(20	)	—		—			—			—			—			—
Cash dividends declared	—		—		—			—			(9,787		)	—			(9,787		)
Stock-based compensation	—		—		15,742			—			—			—			15,742
Income tax benefit associated with stock options	—		—		(1,025		)	—			—			—			(1,025		)
Repurchase of common stock	(1,007	)	—		—			—			—			(17,817		)	(17,817		)
Sale of treasury stock	429		—		(5,042		)	—			—			10,240			5,198
Retirement of treasury stock	—		—		—			—			(330,227		)	330,227			—
Balances at March 31, 2009	48,892		678		386,224			8,855			203,936			(74,326		)	525,367
Net income	—		—		—			—			57,378			—			57,378
Foreign currency translation adjustments	—		—		—			1,047			—			—			1,047
Unrealized loss on hedges, net of tax	—		—		—			(3,630		)	—			—			(3,630		)
Comprehensive income																	54,795
Exercise of stock options	1,493		15		32,564			—			—			—			32,579
Issuance of restricted common stock	154		2		—			—			—			—			2
Repurchase of restricted common stock	(18	)	—		—			—			—			—			—
Cash dividends declared	—		—		—			—			(9,781		)	—			(9,781		)
Stock-based compensation	—		—		14,877			—			—			—			14,877
Income tax benefit associated with stock options	—		—		(476		)	—			—			—			(476		)
Repurchase of common stock	(1,935	)	—		—			—			—			(49,652		)	(49,652		)
Sale of treasury stock	284		—		(4,782		)	—			—			8,405			3,623
Retirement of treasury stock	—		—		—			—			(56,240		)	56,240			—
Balances at March 31, 2010	48,870		695		428,407			6,272			195,293			(59,333		)	571,334
Net income	—		—		—			—			109,243			—			109,243
Foreign currency translation adjustments	—		—		—			1,613			—			—			1,613
Unrealized loss on hedges, net of tax	—		—		—			(6,419		)	—			—			(6,419		)
Unrealized gain on investments, net of tax	—		—		—			7			—			—			7
Comprehensive income																	104,444
Exercise of stock options	2,196		22		50,084			—			—			—			50,106
Issuance of restricted common stock	424		3		—			—			—			—			3
Repurchase of restricted common stock	(26	)	—		—			—			—			—			—
Cash dividends declared	—		—		—			—			(9,703		)	—			(9,703		)
Stock-based compensation	—		—		15,873			—			—			—			15,873
Income tax benefit associated with stock options	—		—		4,319			—			—			—			4,319
Repurchase of common stock including taxes paid related to net share settlement on equity awards	(3,321	)	—		—			—			—			(105,716		)	(105,716		)
Sale of treasury stock	172		—		344			—			—			3,848			4,192
Retirement of treasury stock	—		—		—			—			(102,365		)	102,365			—
Balances at March 31, 2011	48,315		$	720	$	499,027		$	1,473		$	192,468		$	(58,836	)	$	634,852

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

Product Warranty Obligations

Fair Value

Income Taxes

Goodwill and Intangibles

Revenue Recognition

Our revenue is derived primarily from the sale of headsets, telephone headset systems and accessories for the business and consumer markets. We recognize revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the sales price is fixed or determinable and collection is reasonably assured. These criteria are usually met at the time of product shipment; however, we defer revenue when any significant obligations remain. Customer purchase orders and/or contracts are generally used to determine the existence of an arrangement. Product is considered delivered once it has been shipped and title and risk of loss have been transferred to the customer. We assess whether a price is fixed or determinable based upon the selling terms associated with the transaction and whether the sales price is subject to refund or adjustment. We assess collectibility based on a customer's credit quality as well as subjective factors and trends including historical experience, the age of any existing accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay.

For multiple-element arrangements, we allocate revenue to each element based upon the relative selling price of each deliverable. When applying the relative selling price method, we determine the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of selling price, if it exists, or third-party evidence ("TPE") of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, we use the estimated selling price ("ESP") for that deliverable. Revenue allocated to each element is then recognized when the other revenue recognition criteria are met for each element. We regularly review our basis for establishing VSOE, TPE and ESP. We do not expect a material impact in the near term from changes in VSOE, TPE or ESP.

Product Returns

We record reductions to revenue for expected future product returns based on historical return rates and other relevant factors such as assumptions regarding the rate of sell-through to end users from our various channels based on historical sell-through rates. Such estimates may need to be revised and could have an adverse impact on revenues if product lives vary significantly from management estimates, a particular sales channel experiences a higher than estimated return rate, or sell-through rates are slower causing inventory build-up.

Customer Programs

We record reductions to revenue for estimated commitments related to cooperative advertising, marketing development funds, volume rebates and special pricing programs. These estimated commitments are based on actual expenses incurred during the period, estimates for what is due to resellers for estimated credits earned during the period, any adjustments for credits based on actual activity, and estimates for any increased promotional programs or decreased pricing on inventory in the channel. If the actual payments exceed management's estimates, this could result in an adverse impact on our revenues.

Inventory and Related Reserves

Inventories are valued at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Costs such as idle facility expense, double freight, and re-handling costs are accounted for as current-period charges. Fixed production overhead is allocated to the costs of conversion based on the normal capacity of the production facilities. All shipping and handling costs incurred in connection with the sale of products are included in the Cost of revenues.

Our products require long-lead time parts available from a limited number of vendors and, occasionally, last-time buys of raw materials for products with long lifecycles. The effects of demand variability, long-lead times and last-time buys have historically contributed to inventory write-downs. Our demand forecast considers projected future shipments, market conditions, inventory on hand, purchase commitments, product development plans and product life expectancy, inventory on consignment and other competitive factors. If the demand forecast is greater than actual demand and we believe we can no longer sell our inventory above cost or at all, we write that inventory down to market value or write-off the excess or obsolete inventory. We routinely review inventory for usage potential, including fulfillment of customer warranty obligations and spare part requirements; however, failure to accurately forecast demand or manage our supply chain accordingly could result in the write down of additional inventory which would negatively impact our gross profit.

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Once inventory is written down, subsequent changes in facts and circumstances do not result in the restoration to the original cost or an increase in the new, lower-cost basis.

Product WarrantyObligations

Fair Value

Income Taxes

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Goodwill and Intangibles

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

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Recently Issued Pronouncements

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE AND MARKET RISK

FOREIGN CURRENCY EXCHANGE RATE RISK

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Non-designated Hedges

We hedge our EUR, GBP and AUD denominated cash, receivables and payables balances by entering into foreign exchange forward contracts.



Currency - forward contracts	Position	USD Value of Net Foreign Exchange Contracts		Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange (Loss) From 10% Depreciation of USD
EUR	Sell Euro	$	25.5	$	2.6	$	(2.6	)
GBP	Sell GBP	6.4		0.6		(0.6		)
AUD	Sell AUD	$	3.5	$	0.4	$	(0.4	)
Net position		$	35.4	$	3.6	$	(3.6	)

Cash Flow Hedges



Currency - option contracts	USD Value of Net Foreign Exchange Contracts			Foreign Exchange Gain From 10% Appreciation of USD		Foreign Exchange (Loss) From 10% Depreciation of USD
Call options	$	(96.0	)	$	3.5	$	(7.1	)
Put options	89.2			2.8		(0.8		)
Net position	$	(6.8	)	$	6.3	$	(7.9	)

The table below presents the impact on the valuation of our cross-currency swap contracts of a hypothetical 10% appreciation and a 10% depreciation of the USD as of March 31, 2011 (in millions):



Currency - cross-currency swap contracts	USD Value of Cross-Currency Swap Contracts		Foreign Exchange (Loss) From 10% Appreciation of USD			Foreign Exchange Gain From 10% Depreciation of USD
Position: Buy MX$	$	27.9	$	(2.6	)	$	3.1

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Plantronics, Inc.:

/s/ PricewaterhouseCoopers LLP

San Jose, California

May 31, 2011

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PLANTRONICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)



	March 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	284,375		$	349,961
Short-term investments	145,581			19,231
Accounts receivable, net	103,289			88,328
Inventory, net	56,473			70,518
Deferred income taxes	11,349			10,911
Other current assets	16,653			21,782
Assets held for sale	—			8,861
Total current assets	617,720			569,592
Long-term investments	39,332			—
Property, plant and equipment, net	70,622			65,700
Intangibles, net	856			3,449
Goodwill	14,005			14,005
Other assets	2,112			2,605
Total assets	$	744,647		$	655,351
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	33,995		$	23,779
Accrued liabilities	59,607			45,837
Total current liabilities	93,602			69,616
Deferred tax liability	3,526			551
Long-term income taxes payable	11,524			12,926
Other long-term liabilities	1,143			924
Total liabilities	109,795			84,017
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.01 par value per share; 1,000 shares authorized, no shares outstanding	—			—
Common stock, $0.01 par value per share; 100,000 shares authorized, 50,043 shares and 51,449 shares issued at 2011 and 2010, respectively	720			695
Additional paid-in capital	499,027			428,407
Accumulated other comprehensive income	1,473			6,272
Retained earnings	192,468			195,293
Total stockholders' equity before treasury stock	693,688			630,667
Less: Treasury stock (common: 1,728 and 2,579 shares at 2011 and 2010, respectively) at cost	(58,836		)	(59,333		)
Total stockholders' equity	634,852			571,334
Total liabilities and stockholders' equity	$	744,647		$	655,351

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)



	Fiscal Year Ended March 31,
	2011			2010			2009
Net revenues	$	683,602		$	613,837		$	674,590
Cost of revenues	321,846			312,767			382,659
Gross profit	361,756			301,070			291,931
Operating expenses:
Research, development and engineering	63,183			57,784			63,840
Selling, general and administrative	163,389			143,784			155,678
Gain from litigation settlement	(5,100		)	—			—
Restructuring and other related charges	(428		)	1,867			10,952
Total operating expenses	221,044			203,435			230,470
Operating income	140,712			97,635			61,461
Interest and other income (expense), net	(56		)	3,105			(3,544		)
Income from continuing operations before income taxes	140,656			100,740			57,917
Income tax expense from continuing operations	31,413			24,287			12,575
Income from continuing operations, net of tax	109,243			76,453			45,342
Discontinued operations:
Loss from operations of discontinued AEG segment (including loss on sale)	—			(30,468		)	(142,633		)
Income tax benefit on discontinued operations	—			(11,393		)	(32,392		)
Loss on discontinued operations, net of tax	—			(19,075		)	(110,241		)
Net income (loss)	$	109,243		$	57,378		$	(64,899	)

Earnings (loss) per common share:
Basic
Continuing operations	$	2.29		$	1.58		$	0.93
Discontinued operations	$	—		$	(0.39	)	$	(2.27	)
Net income (loss)	$	2.29		$	1.18		$	(1.34	)
Diluted
Continuing operations	$	2.21		$	1.55		$	0.93
Discontinued operations	$	—		$	(0.39	)	$	(2.25	)
Net income (loss)	$	2.21		$	1.16		$	(1.33	)

Shares used in basic per share calculations	47,713			48,504			48,589
Shares used in diluted per share calculations	49,344			49,331			48,947

Cash dividends declared per common share	$	0.20		$	0.20		$	0.20

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	Fiscal Year Ended March 31,
	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	109,243		$	57,378		$	(64,899	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	16,275			18,144			25,822
Stock-based compensation	15,873			14,577			15,742
Provision for (benefit from) doubtful accounts and sales allowances	(8		)	(243		)	2,698
Provision for excess and obsolete inventories	1,099			418			11,364
Benefit from deferred income taxes	(5,165		)	(12,449		)	(26,853		)
Income tax benefit associated with stock option exercises	6,195			3,669			1,025
Excess tax benefit from stock-based compensation	(5,747		)	(2,247		)	(592		)
Amortization of premium (accretion of purchase discounts) on investments, net	578			—			—
Impairment of goodwill and long-lived assets	—			25,194			117,464
Non-cash restructuring charges	—			6,261			581
Loss on sale of discontinued operations	—			611			—
Other operating activities	(5		)	384			358
Changes in assets and liabilities:
Accounts receivable, net	(15,086		)	388			50,706
Inventory, net	12,962			27,620			(5,358		)
Current and other assets	(2,280		)	2,868			(6,935		)
Accounts payable	10,216			(9,048		)	(15,069		)
Accrued liabilities	9,873			(1,001		)	(6,701		)
Income taxes	4,209			11,205			(203		)
Cash provided by operating activities	158,232			143,729			99,150
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of short-term investments	28,034			4,000			—
Proceeds from maturities of short-term investments	114,495			145,000			30,000
Purchase of short-term investments	(256,258		)	(84,990		)	(89,896		)
Proceeds from sales of long-term investments	664			750			—
Purchase of long-term investments	(48,870		)	—			—
Capital expenditures and other assets	(18,567		)	(6,262		)	(23,682		)
Proceeds from sale of property, plant and equipment and assets held for sale	9,066			277			—
Proceeds received from sale of AEG segment	1,625			9,121			—
Other investing activities	(100		)	—			406
Cash provided by (used for) investing activities	(169,911		)	67,896			(83,172		)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock including taxes paid related to net share settlement on equity awards	(105,716		)	(49,652		)	(17,817		)
Proceeds from sale of treasury stock	4,192			3,623			5,198
Proceeds from issuance of common stock	50,109			32,581			6,899
Payment of cash dividends	(9,703		)	(9,781		)	(9,787		)
Excess tax benefit from stock-based compensation	5,747			2,247			592
Cash used for financing activities	(55,371		)	(20,982		)	(14,915		)
Effect of exchange rate changes on cash and cash equivalents	1,464			1,125			(5,961		)
Net increase (decrease) in cash and cash equivalents	(65,586		)	191,768			(4,898		)
Cash and cash equivalents at beginning of year	349,961			158,193			163,091
Cash and cash equivalents at end of year	$	284,375		$	349,961		$	158,193
SUPPLEMENTAL DISCLOSURES
Cash paid for income taxes	$	29,180		$	11,663		$	12,519

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)



	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Retained			Treasury			Total Stockholders'
	Shares		Amount		Capital			Income (Loss)			Earnings			Stock			Equity
Balances at March 31, 2008	48,944		$	673	$	369,655		$	(3,581	)	$	608,849		$	(396,976	)	$	578,620
Net loss	—		—		—			—			(64,899		)	—			(64,899		)
Foreign currency translation adjustments	—		—		—			(2,606		)	—			—			(2,606		)
Unrealized gain on hedges, net of tax	—		—		—			12,179			—			—			12,179
Unrealized gain on long-term investments, net of tax	—		—		—			2,863			—			—			2,863
Comprehensive loss																	(52,463		)
Exercise of stock options	359		4		6,894			—			—			—			6,898
Issuance of restricted common stock	187		1		—			—			—			—			1
Repurchase of restricted common stock	(20	)	—		—			—			—			—			—
Cash dividends declared	—		—		—			—			(9,787		)	—			(9,787		)
Stock-based compensation	—		—		15,742			—			—			—			15,742
Income tax benefit associated with stock options	—		—		(1,025		)	—			—			—			(1,025		)
Repurchase of common stock	(1,007	)	—		—			—			—			(17,817		)	(17,817		)
Sale of treasury stock	429		—		(5,042		)	—			—			10,240			5,198
Retirement of treasury stock	—		—		—			—			(330,227		)	330,227			—
Balances at March 31, 2009	48,892		678		386,224			8,855			203,936			(74,326		)	525,367
Net income	—		—		—			—			57,378			—			57,378
Foreign currency translation adjustments	—		—		—			1,047			—			—			1,047
Unrealized loss on hedges, net of tax	—		—		—			(3,630		)	—			—			(3,630		)
Comprehensive income																	54,795
Exercise of stock options	1,493		15		32,564			—			—			—			32,579
Issuance of restricted common stock	154		2		—			—			—			—			2
Repurchase of restricted common stock	(18	)	—		—			—			—			—			—
Cash dividends declared	—		—		—			—			(9,781		)	—			(9,781		)
Stock-based compensation	—		—		14,877			—			—			—			14,877
Income tax benefit associated with stock options	—		—		(476		)	—			—			—			(476		)
Repurchase of common stock	(1,935	)	—		—			—			—			(49,652		)	(49,652		)
Sale of treasury stock	284		—		(4,782		)	—			—			8,405			3,623
Retirement of treasury stock	—		—		—			—			(56,240		)	56,240			—
Balances at March 31, 2010	48,870		695		428,407			6,272			195,293			(59,333		)	571,334
Net income	—		—		—			—			109,243			—			109,243
Foreign currency translation adjustments	—		—		—			1,613			—			—			1,613
Unrealized loss on hedges, net of tax	—		—		—			(6,419		)	—			—			(6,419		)
Unrealized gain on investments, net of tax	—		—		—			7			—			—			7
Comprehensive income																	104,444
Exercise of stock options	2,196		22		50,084			—			—			—			50,106
Issuance of restricted common stock	424		3		—			—			—			—			3
Repurchase of restricted common stock	(26	)	—		—			—			—			—			—
Cash dividends declared	—		—		—			—			(9,703		)	—			(9,703		)
Stock-based compensation	—		—		15,873			—			—			—			15,873
Income tax benefit associated with stock options	—		—		4,319			—			—			—			4,319
Repurchase of common stock including taxes paid related to net share settlement on equity awards	(3,321	)	—		—			—			—			(105,716		)	(105,716		)
Sale of treasury stock	172		—		344			—			—			3,848			4,192
Retirement of treasury stock	—		—		—			—			(102,365		)	102,365			—
Balances at March 31, 2011	48,315		$	720	$	499,027		$	1,473		$	192,468		$	(58,836	)	$	634,852

The accompanying notes are an integral part of these consolidated financial statements.

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PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.	THE COMPANY

Plantronics, Inc. (“Plantronics” or “the Company”) is a leading worldwide designer, manufacturer, and marketer of lightweight communications headsets, telephone headset systems, and accessories for the business and consumer markets under the Plantronics brand. In addition, the Company manufactures and markets, under the Clarity brand, specialty telephone products, such as telephones for the hearing impaired, and other related products for people with special communication needs.

Founded in 1961, Plantronics is incorporated in the state of Delaware and trades on the New York Stock Exchange under the ticker symbol “PLT”.

2. SIGNIFICANT ACCOUNTING POLICIES

Management's Use of Estimates and Assumptions

The preparation of consolidated financial statements in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements. Actual results could differ materially from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of Plantronics and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

Reclassifications

Certain financial statement reclassifications have been made to previously reported amounts to conform to the current year's presentation.

Segment Information

Prior to December 1, 2009, the Company operated under two reportable segments, the Audio Communications Group (“ACG”) and the Audio Entertainment Group (“AEG”). As set forth in Note 4, Discontinued Operations, the Company completed the sale of Altec Lansing, its AEG segment, effective December 1, 2009, and, therefore, it is no longer included in continuing operations and the Company operates as one segment. Accordingly, the Company has classified the AEG operating results, including the loss on sale of AEG, as discontinued operations in the Consolidated statement of operations for all periods presented.

Fiscal Year

The Company’s fiscal year ends on the Saturday closest to the last day of March. Fiscal 2011 ended on April 2, 2011 and consists of 52 weeks, fiscal 2010 ended on April 3, 2010 and consists of 53 weeks, and fiscal 2009 ended on March 28, 2009 and consists of 52 weeks. For purposes of presentation, the Company has indicated its accounting fiscal year as ending on March 31.

Financial Instruments

The carrying values of certain of the Company’s financial instruments, including cash, cash equivalents, short-term available-for-sale investments, accounts receivable, and accounts payable approximate fair value due to their short maturities.

Cash and Cash Equivalents

All highly liquid investments with remaining maturities of three months or less at the date of purchase are classified as cash equivalents.

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Investments

The goals of the Company's investment policy, in order of priority, are preservation of capital, maintenance of liquidity and maximization of after-tax investment income. Investments are limited to investment grade securities with limitations by policy on the percent of the total portfolio invested in any one issue. All of the Company's investments are held in its name at a limited number of major financial institutions. Short-term investments have a remaining maturity of greater than three months at the date of purchase and an effective maturity of less than one year and long-term investments have effective maturities greater than one year or the Company does not currently have the ability to liquidate the investment.

Investments are carried at fair value based upon quoted market prices at the end of the reporting period where available. As of March 31, 2011, all investments were classified as available-for-sale with unrealized gains and losses recorded as a separate component of Accumulated other comprehensive income in Stockholders’ equity. The specific identification method is used to determine the cost of securities disposed of, with realized gains and losses reflected in Interest and other income (expense), net.

The Company reviews its investments for impairment on a quarterly basis. For investments with an unrealized loss, the factors considered in the review include the credit quality of the issuer, the duration that the fair value has been less than the adjusted cost basis, severity of impairment, reason for the decline in value and potential recovery period, the financial condition and near-term prospects of the investees, and whether the Company would be required to sell an investment due to liquidity or contractual reasons before its anticipated recovery. (See Note 5)

Derivatives

The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributed to the risk being hedged. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of Accumulated other comprehensive income in Stockholders’ equity and subsequently reclassified into earnings when the hedged exposure affects earnings. The ineffective portion of the gain or loss is reported in earnings immediately. For derivative instruments that are not designated as accounting hedges, changes in fair value are recognized in earnings in the period of change. The Company does not hold or issue derivative financial instruments for speculative trading purposes. Plantronics enters into derivatives only with counterparties that are among the largest United States ("U.S.") banks, ranked by assets, in order to minimize its credit risk and to date, no such counterparty has failed to meet its financial obligations under such contracts. (See Note 14)

Provision for Doubtful Accounts

The Company maintains a provision for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Plantronics regularly performs credit evaluations of its new and existing customers’ financial conditions and considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer’s ability to pay. The provision for doubtful accounts is reviewed quarterly and adjusted, if necessary, based on management’s assessment of a customer’s ability to pay. If the financial condition of customers should deteriorate, additional provisions may be required which could have an adverse impact on operating expenses.

Inventory and Related Reserves

The Company's products require long-lead time parts available from a limited number of vendors and occasionally, last-time buys of raw materials for products with long lifecycles. The effects of demand variability, long-lead times and last-time buys have historically contributed to inventory write-downs. The Company's demand forecast considers projected future shipments, market conditions, inventory on hand, purchase commitments, product development plans and product life expectancy, inventory on consignment and other competitive factors. If the demand forecast is greater than actual demand and the Company believes it can no longer sell the inventory above cost or at all, management writes that inventory down to market value or writes-off the excess or obsolete inventory. The Company routinely reviews inventory for usage potential, including fulfillment of customer warranty obligations and spare part requirements; however, failure to accurately forecast demand or manage the supply chain accordingly could result in the write down of additional inventory which would negatively impact the Company's gross profit.

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Once inventory is written down, subsequent changes in facts and circumstances do not result in restoration to the original cost basis or an increase in the new, lower-cost basis.

Product Warranty Obligations

The Company provides for product warranties in accordance with the underlying contractual terms given to the customer or end user of the product. The contractual terms ~~may~~ vary depending upon the geographic region in which the customer is located, the ~~brand and~~ type of product sold, and other conditions, which affect or limit the customer’s rights to return product under warranty. Where specific warranty return rights are given to customers, management accrues for the estimated cost of those warranties at the time revenue is recognized. Generally, warranties start at the delivery date to the customer or end user and continue for one or two ~~years, depending on the type and brand, and the location in which the product was purchased.~~years. Where specific warranty return rights are not given to ~~t he~~the customers but where the customers are granted limited rights of return or discounts in lieu of warranty, management records these rights of return or discounts as adjustments to revenue. ~~In certain circumstances, the Company may sell product without warranty, and, accordingly, no charge is taken for warranty.~~ Factors that affect the warranty obligation include sales terms, which obligate the Company to provide warranty, product failure rates, estimated return rates, material usage, and service delivery costs incurred in correcting product failures. Management assesses the adequacy of the recorded warranty obligation quarterly and makes adjustments to the obligation based on the actual experience and changes in estimated future return rates. If the Company’s estimates are less than the actual costs of providing warranty related services, the Company could be required to record additional warranty reserves, which would have a negative impact on its gross ~~pro fit.~~profit.

Goodwill and Intangibles

As a result of past acquisitions, the Company has recorded goodwill and intangible assets on the consolidated balance sheets. In accordance with current accounting principles, the Company classifies intangible assets into three categories: (1) goodwill; (2) intangible assets with indefinite lives not subject to amortization; and (3) intangible assets with definite lives subject to amortization.

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Goodwill has been measured as the excess of the cost of acquisition over the amount assigned to tangible and identifiable intangible assets acquired less liabilities assumed. The identification and measurement of goodwill impairment involves the estimation of fair value at the Company’s reporting unit level. The Company determines its reporting units by assessing whether discrete financial information is available and if segment management regularly reviews the results of that component. Such impairment tests for goodwill include comparing the fair value of athe reporting unit with its carrying value, including goodwill. The ~~estimates~~estimate of the fair ~~values~~value of the reporting ~~units are~~unit is based on the best information available as of the date of the assessment which primarily incorporate management assumptions about expected future cash flows, discount rates, overall market growth and the ~~Company’s~~reporting unit’s percentage of that market and growth rates in terminal values, estimated costs and other ~~fact ors,~~factors, which utilize historical data, internal estimates, and, in some cases, outside data. If the carrying value of the reporting unit exceeds management’s estimate of fair value, goodwill may become impaired, and the Company may be required to record an impairment charge, which would negatively impact its operating results. (See Note 8)

The fair value measurement of purchased intangible assets with indefinite lives involves the estimation of the fair value which is based on management assumptions about expected future cash flows, discount rates, growth rates, estimated costs and other factors which utilize historical data, internal estimates, and, in some cases, outside data. If the carrying value of the indefinite ~~useful life~~lived intangible asset exceeds management’s estimate of fair value, the asset may become impaired, and the Company may be required to record an impairment charge which would negatively impact its operating results.

Purchased intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the ~~assets, which range from three to ten years.~~assets. Long-lived assets, including intangible assets, are reviewed for impairment ~~in accordance with the Property, Plant, and Equipment Topic of the FASB ASC~~ whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such conditions may include an economic downturn or a change in the assessment of future operations. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is ~~b ased~~based on the amount that the carrying value of the asset exceeds its fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. When testing long-lived assets for recoverability, the Company also reviews depreciation and/or amortization estimates and methods to assess whether the assets' remaining useful lives are still appropriate or should be revised. (See Note 9)

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is principally calculated using the straight-line method over the estimated useful lives of the respective assets, which range from five to 30thirty years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the remaining lease term. Consolidated depreciation and amortization expense, including both continuing and discontinued operations, for fiscal 2008, 2009 and 2010 was $20.3 million, $19.6 million and $16.4 million, respectively. In addition, the Company incurred $5.2 million of accelerated depreciation in Fiscal 2010 related to Assets held for Sale on its Suzhou China facilities which was incl uded in Restructuring and other related charges on the Consolidated statement of earnings.

Costs associated with internal-use software are recorded in accordance with the Intangibles –- Goodwill and Other Topic of the ~~ASC.~~Accounting Standards Codification ("ASC"). Capitalized software costs are amortized on a straight-line basis over the estimated useful life. Unamortized capitalized software costs were $9.6 million and $7.3 million at March 31, 2009 and 2010, respectively. The consolidated amounts amortized to expense in both continuing and discontinued operations were $2.4 million, $3.1 million, and $3.0 million in fiscal 2008, 2009 and 2010, respectively.

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Revenue Recognition

~~Revenue~~The Company's revenue is derived primarily from ~~sales~~the sale of ~~products to customers is recognized~~headsets, telephone headset systems and accessories for the business and consumer markets. The Company recognizes revenue when ~~the following~~all four revenue recognition criteria have been met:

~~title and risk of ownership are transferred to customers;~~

~~persuasive evidence of an arrangement exists;~~

~~the price to the buyer is fixed or determinable; and~~

~~collection is reasonably assured.~~

persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the sales price is fixed or determinable and collection is reasonably assured. These criteria are usually met at the time of product shipment; however, the Company defers revenue when any significant obligations remain. Customer purchase orders and/or contracts are generally used to determine the existence of an arrangement. Product is considered delivered once it has been shipped and title and risk of loss have been transferred to the customer. The Company assesses whether a price is fixed or determinable based upon the selling terms associated with the transaction and whether the sales price is subject to refund or adjustment. The Company assesses collectibility based on a ~~customer’s~~customer's credit quality as well as subjective factors and trends including historical experience, the age of any existing accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a ~~customer’s~~customer's ability to pay.

In October 2009, the Financial Accounting Standards Board (FASB) amended the accounting standards for revenue recognition to remove from the scope of industry-specific software revenue recognition guidance, tangible products containing software components and non-software components that function together to deliver the product's essential functionality. In October 2009, the FASB also amended the accounting standards for multiple-deliverable revenue arrangements to:


i.	provide updated guidance on whether multiple deliverables exist, how the deliverables in an arrangement should be separated, and how the consideration should be allocated;


ii.	require an entity to allocate revenue in an arrangement using estimated selling prices ("ESP") of deliverables if a vendor does not have vendor-specific objective evidence of selling price ("VSOE") or third-party evidence of selling price ("TPE"); and


iii.	eliminate the use of the residual method and require an entity to allocate revenue using the relative selling price method.

The Company ~~defers~~elected to early adopt this accounting guidance at the beginning of our first quarter of fiscal 2011 on a prospective basis for applicable transactions originating or materially modified after April 3, 2010. Implementation of these Accounting Standards Updates ("ASUs") did not have a material impact on reported net revenues as compared to net revenues under previous guidance as the Company does not typically enter into multiple-element arrangements. In addition, the new guidance did not change the units of accounting within sales arrangements and the elimination of the residual method for the allocation of arrangement consideration had no material impact on the amount and timing of reported net revenues.

For multiple-element arrangements, the Company allocates revenue ~~but recognizes related cost~~to each element based upon the relative selling price of ~~revenues~~each deliverable. When applying the relative selling price method, we determine the selling price for each deliverable using VSOE of selling price, if ~~collectibility cannot be reasonably assured. Plantronics recognizes~~it exists, or TPE of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses its best estimate of selling price for that deliverable. Revenue allocated to each element is then recognized when the other revenue ~~net of estimated~~recognition criteria are met for each element. The Company regularly reviews its basis for establishing VSOE, TPE and ESP. The Company does not expect a material impact in the near term from changes in VSOE, TPE or ESP.

Product Returns

The Company records reductions to revenue for expected future product returns ~~and expected payments to resellers for customer programs including cooperative advertising, marketing development funds, volume rebates, and special pricing programs.~~

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~~Estimated product returns are deducted from revenues upon shipment,~~ based on historical return rates and other relevant factors such as assumptions regarding the rate of sell-through to end users from our various channels based on historical sell-through ~~rates, and other relevant factors.~~rates. Such estimates may need to be revised and could have an adverse impact on revenues if product lives vary significantly from management estimates, a particular ~~selling~~sales channel experiences a higher than estimated return rate, or sell-through rates are slower causing inventory build-up.

~~Cooperative~~Customer Programs

The Company records reductions to revenue for estimated commitments related to cooperative advertising, ~~and~~ marketing development funds, are accounted for in accordance with the Revenue Recognition Topic of the FASB ASC. Under these guidelines, the Company accrues for these funds as marketing expense if it receives a separately identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues.

~~Reductions to revenue for expected and actual payments to resellers for~~ volume rebates and special pricing ~~protection~~programs. These estimated commitments are based on actual expenses incurred during the period, estimates for what is due to resellers for estimated credits earned during the period ~~and~~, any adjustments for credits based on actual ~~activity.~~activity, and estimates for any increased promotional programs or decreased pricing on inventory in the channel. If the actual payments exceed ~~management’s~~management's estimates, this could result in an adverse impact on the ~~Company’s~~Company's revenues. Since management has historically been able to reliably estimate the amount of allowances required for future price adjustments and product returns, the Company recognizes revenue, net of projected allowances, upon recognition of the related sale. In situations where management is unable to reliably estimate the amount of future price adjustments and product returns, t he Company defers recognition of the revenue until the right to future price adjustments and product returns lapses, and the Company is no longer under any obligation to reduce the price or accept the return of the product.

If market conditions warrant, Plantronics may take actions to stimulate demand, which could include increasing promotional programs, decreasing prices, or increasing discounts. Such actions could result in incremental reductions to revenues and margins at the time such incentives are offered. To the extent that Plantronics reduces pricing, the Company may incur reductions to revenue for price protection based on management’s estimate of inventory in the channel that is subject to such pricing actions.

Advertising Costs

The Company expenses all advertising costs as incurred. Consolidated advertising expense included in both continuing and discontinued operations for the years ended March 31, ~~2008,~~2011, 2010 and 2009 ~~and 2010~~ was ~~$9.9~~$2.4 million, ~~$6.9~~$4.6 million and ~~$4.6~~$6.9 million, respectively.

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Income Taxes

The Company is subject to income taxes both in the U.S. as well as in several foreign jurisdictions. The Company must make certain estimates and judgments in determining income tax expense for its financial statements. These estimates occur in the calculation of tax benefits and deductions, tax credits, and tax assets and liabilities which are generated from differences in the timing of when items are recognized for book purposes and when they are recognized for tax purposes.

The impact of an uncertain income tax position on income tax expense must be recognized at the largest amount that is more-likely-than-not to be sustained. An uncertain income tax position will not be recognized unless it has a greater than 50% likelihood of being sustained. ~~As of March 31, 2010, the Company had $11.2 million of unrecognized tax benefits, all of which would favorably impact the effective tax rate in future periods if recognized.~~ The Company continues to follow the practice of recognizing interest and penalties related to income tax matters as a part of the provision for income taxes.

The Company accounts for income taxes under an asset and liability approach that requires the expected future tax consequences of temporary differences between book and tax bases of assets and liabilities to be recognized as deferred tax assets and liabilities. Valuation allowances are established to reduce deferred tax assets when, based on available objective evidence, it is more likely than not that the benefit of such assets will not be realized. (See Note ~~15)~~16)

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Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period, less common stock subject to repurchase. Diluted earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include shares issuable upon the exercise of outstanding stock options, the vesting of awards of restricted stock ~~awards~~ and the estimated shares to be purchased under the Company’s employee stock purchase plan, which are reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of stock-based compensation cost for future services that the Company has not yet recognized, and the amount of tax benefit that would be recorded in additional paid-in capital upon exercise are assumed to be used to repurchase shares. (See Note ~~16)~~17)

Comprehensive Income (Loss)

Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (expense). Other comprehensive income (loss) refers to income, expenses, gains, and losses that under ~~generally accepted accounting principles~~U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net income (loss). Accumulated other comprehensive income, as presented in the accompanying consolidated balance sheets, consists of foreign currency translation adjustments, unrealized gains and losses on derivatives designated as cash flow hedges, net of tax, and unrealized gains and losses related to the Company’s investments, net of tax.

Foreign Operations and Currency Translation

The functional currency of the Company’s foreign sales and marketing offices, except as noted in the following paragraph, is the local currency of the respective operations. For these foreign operations, the Company translates assets and liabilities into U.S. dollars using the period-end exchange rates in effect as of the balance sheet date and translates revenues and expenses using the average monthly exchange rates. The resulting cumulative translation adjustments are included in Accumulated other comprehensive income, a separate component of Stockholders' equity in the accompanying consolidated balance sheets.

The functional currency of the Company’s European finance, sales and logistics headquarters in the Netherlands, sales office and warehouse in Japan, manufacturing facilities in Tijuana, Mexico and logistic and research and development facilities in China, is the U.S. Dollar. For these foreign operations, assets and liabilities denominated in foreign currencies are re-measured at the period-end or historical rates, as appropriate. Revenues and expenses are re-measured at average monthly rates which the Company believes to be a fair approximation of actual rates. Currency transaction gains and losses are recognized in current operations. ~~Realized foreign currency exchange gains (losses) were $0.9 million, $(6.3) million, and $1.0 million in fiscal 2008, 2009 and 2010, respectively.~~(See Note 14)

Stock-Based Compensation Expense

The Company applies the provisions of the Compensation – Stock Compensation Topic of the FASB ASC which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and non-employee directors based on estimated fair values. (See Note 12)

~~The Company has elected to adopt the alternative transition method for calculating the tax effects~~

Table of stock-based compensation pursuant to the accounting principle. The alternative transition method includes simplified methods to establish the beginning balance of the additional paid-in capital pool ("APIC pool") related to the tax effects of employee stock-based compensation, and to determine the subsequent impact on the APIC pool and Consolidated statements of cash flows of the tax effects of employee stock-based compensation awards that are outstanding upon adoption of the accounting principle.Contents

Treasury Shares

~~The~~From time to time, the Company repurchases treasury shares in accordance with approved repurchase plans. On January 25, 2008, the Board of Directors authorized the repurchase of 1,000,000 shares of common stock under which the Company may purchase shares in the open market, depending on the market conditions, from time to time. During fiscal 2008 and 2009, the Company repurchased 1,000,000 shares of its common stock ~~under this repurchase plan~~ in the open market ~~at a total cost of $18.3 million and an average price of $18.30 per share. On November 10, 2008,~~in accordance with repurchase plans approved by the Board of Directors authorized a new plan to repurchase 1,000,000 shares of common stock. During fiscal 2009 and 2010, the Company repurchased 1,000,000 shares of its common stock under this plan in the open market at a totalDirectors. The cost of ~~$23.7 million and an a verage price of $23.66 per share. On November 27, 2009, the Board of Directors authorized a new plan to repurchase 1,000,000~~reacquired shares of common stock. During fiscal 2010, the Company repurchased 1,000,000 shares of its common stock under this plan in the open market at a total cost of $26.3 million and an average price of $26.26 per share.

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On March 1, 2010, the Board of Directors authorized a new plan to repurchase 1,000,000 shares of common stock. During fiscal 2010, the Company repurchased 24,100 shares of its common stock under this plan in the open market at a total cost of $0.8 million and an average price of $31.31 per share. As of March 31, 2010, there were 975,900 remaining shares authorized for repurchase.

~~On January 13, 2009 and December 2, 2009, the Company retired 16.0 million shares and 2.0 million shares, respectively,~~ of treasury stock which ~~were~~are returned to the status of authorized but unissued ~~shares. These were non-cash equity transactions in which the cost of the reacquired~~ shares ~~was~~are recorded as a deduction to both ~~retained~~Retained earnings and ~~treasury~~Treasury stock. (See Note 12)

Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, short-term ~~securities,~~and long-term investments, and trade receivables.

Plantronics’ investment policies for cash limit investments to those that are ~~short-term and~~ low risk and also limit the amount of credit exposure to any one issuer and restrict placement of these investments to issuers evaluated as creditworthy. Cash equivalents have a remaining maturity of three months or less at the date of purchase. Short-term securities have a remaining maturity of greater than three months at the date of purchase. Long-term investments have maturities greater than one year or we do not currently have the ability to liquidate the investment. As ~~a result of the uncertai nties in the credit markets and the UBS right offer, as~~ of March 31, ~~2009,~~2011, the ~~Company had classified all of its ARS investments as long-term since these~~Company's investments were ~~not currently liquid,~~composed of U.S. Treasury Bills, Government Agency Securities, Commercial Paper, U.S. Corporate Bonds and ~~the Company would not be able to access these funds until a future auction~~Certificates of ~~these investments is successful, the underlying securities are redeemed by the issuer, or a buyer is found outside of the auction process.~~Deposit ("CDs"). As of March 31, 2010, the Company’s ~~ARS portfolio is classified as a~~ short-term ~~trading security due to management’s intent to exercise the put option with UBS and the expectation that the ARS will be~~investments consisted of Auction Rate Securities ("ARS") which were sold ~~within twelve months.~~

~~All of the ARS investments were investment grade quality and were in compliance with the Company’s investment policy~~at par value at the ~~time~~end of ~~acquisition.~~ June 2010.

Concentrations of credit risk with respect to trade receivables are generally limited due to the large number of customers that comprise the Company’s customer base and their dispersion across different geographies and markets. Plantronics performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its customers. The Company maintains ~~an allowance~~a provision for ~~uncollectible~~doubtful accounts ~~receivable~~ based upon expected collectibility of all accounts receivable.

Certain inventory components that meet the Company’s requirements are available only from a limited number of suppliers. The rapid rate of technological change and the necessity of developing and manufacturing products with short lifecycles may intensify these risks. The inability to obtain components as required, or to develop alternative sources, as required in the future, could result in delays or reductions in product shipments, which in turn could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

3. RECENT ACCOUNTING PRONOUNCEMENTS

~~Other Guarantees and Obligations~~

As is customary in the Company’s industry, as provided for in local law in the U.S. and other jurisdictions, Plantronics’ standard contracts provide remedies to its customers, such as defense, settlement, or payment of judgment for intellectual property claims related to the use of its products. From time to time, the Company indemnifies customers against combinations of loss, expense, or liability arising from various trigger events relating to the sale and use of its products and services. In addition, Plantronics also provides protection to customers against claims related to undiscovered liabilities, additional product liability, or environmental obligations. In the Company’s experience, claims made under these indemnifications are rare and the associated estimated fair value of th e liability is not material.

3.	~~RECENT ACCOUNTING PRONOUNCEMENTS~~

Recently Adopted Pronouncements

In ~~January 2010,~~October 2009, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2010-6,~~ 2009-13, ~~Improving Disclosures About Fair Value Measurements~~Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements ~~, that amends existing disclosure requirements under~~(“ASU 2009-13”). ASU 2009-13 eliminates the ~~Fair Value Measurements~~residual method of allocation and ~~Disclosures Topic~~requires the relative selling price method when allocating deliverables of a multiple-deliverable revenue arrangement. The determination of the selling price for each deliverable requires the use of a hierarchy designed to maximize the use of available objective evidence including VSOE, TPE, or ESP.

ASU 2009-13 and ASU 2009-14 are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and ~~out of levels 1 and 2~~must be adopted in the ~~fair value hierarchy; adding separate disclosures about purchase, sales, issuances,~~same period using the same transition method. If adoption is elected in a period other than the beginning of a fiscal year, the amendments in these standards must be applied retrospectively to the beginning of the fiscal year. Full retrospective application of these amendments to prior fiscal years is optional. We implemented both ASU 2009-13 and ~~settlements relative to level 3 measurements; and clarifying, among other things,~~ASU 2009-14 in the ~~existing fair value disclosures about the level of disaggregation. For Plantronics, this ASU is effective for the fourth~~second quarter of fiscal ~~2010, except for~~2011 with retrospective application to the ~~requirement to provide level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which is effective~~ beginning ~~the first quarter~~ of fiscal ~~2012. Since this standard impacts disclosure requirements only, its adoption~~2011 for transactions that were initiated or materially modified during fiscal 2011. Implementation of these ASUs did not have a material impact on reported net revenues as compared to net revenues under previous guidance as we do not typically enter into multiple element arrangements. In addition, the ~~Company’s~~new guidance did not change the units of accounting within sales arrangements and the elimination of the residual method for the allocation of arrangement consideration had no material impact on the amount and timing of reported net revenues. We do not believe that the effect of adopting these standards will have a material impact on future financial periods.

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Recently Issued Pronouncements

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs ("ASU 2011-04"), which amends ASC 820, Fair Value Measurement. ASU 2011-04 does not extend the use of fair value accounting, but provides guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP or International Financial Reporting Standards (“IFRSs”). ASU 2011-14 changes the wording used to describe many requirements in U.S. GAAP for for measuring fair value and for disclosing information about fair value measurements. Additionally, ASU 2011-14 clarifies the FASB's intent about the application of existing fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011 and is applied prospectively; therefore, the Company will adopt ASU 2011-04 in its fourth quarter of fiscal 2012. The Company does not expect the adoption of ASU 2011-04 to have a material impact on its consolidated financial statements.

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4.	4. DISCONTINUED OPERATIONS

The Company entered into an Asset Purchase Agreement on October 2, 2009, a First Amendment to the Asset Purchase Agreement on November 30, 2009, a Side Letter to the Asset Purchase Agreement on January 8, 2010, and a second Side Letter to the Asset Purchase Agreement on February 15, 2010 (collectively, the “APA”) to sell Altec Lansing, its AEG segment ("AEG"), which was completed effective December 1, 2009. AEG was engaged in the design, manufacture, sales and marketing of audio solutions and related technologies. All of the revenues in the AEG segment were derived from sales of Altec Lansing products. All operations of AEG have been classified as discontinued operations in the Consolidated statement of operations for all periods presented.

Pursuant to the APA, wethe Company received approximately $11.1 million upon closing of the transaction. In addition, the Company originally recorded $5.1 million in contingent escrow assets, which consisted primarily ~~consisted~~ of amounts for (1) potential customer short payments on accounts receivable for sales related reserves that were sold to the Purchaser, (2) potential indemnification ~~claims,~~obligations, and (3) potential adjustments related to the final valuation of net assets sold in comparison to the target net asset value. In the fourth quarter of fiscal 2010, the Company received $2.1 million of the escrow and released $1.4 million of the escrow for potential customer short payments as this was not utilized. ~~The remaining escrow amounts of $1.6 million are included in Other current assets on the Consolidated balance sheet as of March 31, 2010 as they are all collectable within one year.~~

The final purchase price was based on certain post closing adjustments which were finalized in the fourth quarter of fiscal 2010. Consequently, the actual proceeds and net assets sold varied from the amounts reported inIn the third quarter of fiscal ~~2010 based on~~2011, the ~~final net asset value as compared to~~Company received the ~~target net asset value per the APA.~~remaining escrow amounts totaling $1.6 million.

Under the terms of the APA, the Company sold the following net assets, valued at their book value (in thousands):



Inventory, net	$	17,702
Sales related reserves included in Accounts receivable, net	(4,724		)
Property, plant and equipment, net	1,012
Warranty obligation accrual	(383		)
Accrual for inventory claims at manufacturers	(657		)
Adjustment for final assets transferred	(1,893		)
Total net assets sold	$	11,057

The Company retained all existing AEG related accounts receivable, accounts payable and certain other liabilities as of the close date.

The Company recorded a loss of $0.6 million in fiscal 2010 on the sale of Altec Lansing which iswas calculated as follows (in thousands):


Proceeds received upon close	$	11,075		$	11,075
Escrow payments received to date		2,065		2,065
Remaining escrow payments to be received		1,625
Remaining escrow payments to be received (subsequently received in fiscal 2011)				1,625
Payment to purchaser for adjustment for final value of net assets under APA		(3,956	)	(3,956		)
Total estimated proceeds		10,809		10,809
Book value of net assets sold		(11,057	)	(11,057		)
Costs incurred upon closing		(363	)	(363		)
Loss on sale of AEG	$	(611	)	$	(611	)

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During the fiscal year ended March 31, 2009, the Company reported two segments; the Audio Communications Group segment ("ACG") and the AEG segment, which were also deemed reporting units for purposes of the goodwill impairment test. The fair value of the AEG reporting unit was determined using an equal weighting of the income approach and the underlying asset approach. For the income approach, the Company made the following assumptions: the current economic downturn would continue through fiscal 2010, followed by a recovery period in fiscal 2011 and 2012 with slightly better than historical growth, and then growth in line with industry norms for each of the major product lines (Docking Audio and PC Audio). Gross margin assumptions reflected improved margins as the revenue was estimated to grow. A 5% growth factor was used to calculate the terminal value of the reporting unit, consistent with the rate used in the prior year. The discount rate was adjusted from 14% used in the prior year to 15% reflecting the current volatility of the stock prices of public companies within the consumer electronics industry. For the underlying asset approach, the asset and liability balances were adjusted to their fair value equivalents. The fair value of the equity of the business was then indicated by the sum of the fair value of the assets less the fair value of the liabilities. Based on this review, the Company determined that the goodwill related to the AEG reporting unit was impaired requiring the Company to perform step two, in which the fair value of the AEG reporting unit was allocated to all of the assets and liabilities of the AEG reporting unit, including any unrecognized intangible assets, to determine the implied fair value of the goodwill. As a result, the Company recognized a goodwill impairment charge of $54.7 million, which is included in discontinued operations in the Consolidated statement of operations and represented 100% of the goodwill of the Company's AEG reporting unit. There was no tax benefit associated with this impairment charge. There was no impairment related to the Company's ACG reporting unit.

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10. RESTRUCTURING AND OTHER RELATED CHARGES

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~~10.~~

~~RESTRUCTURING AND OTHER RELATED CHARGES~~

The Company recorded the restructuring activities discussed below applying the guidance of either the Exit or Disposal Cost Obligations Topic and the Compensation –- Nonretirement Postemployment Benefits Topic of the FASB ASC.

~~Q3 Fiscal 2008 Restructuring Action~~

~~In November 2007, the~~The Company announced plans to close AEG’s manufacturing facility in Dongguan, China, shut down a related Hong Kong research and development, sales and procurement office and consolidate procurement, research and developmentvarious restructuring activities for AEG in our Shenzhen, China site. The selling, general, and administrative functions of AEG in China have been consolidated with those of ACG throughout the Asia-Pacific region. These actions resulted in the elimination of all manufacturing operation positions in Dongguan, China and certain related support functions. This restructuring plan was part of a strategic initiative designed to reduce fixed costs by outsourcing the majority of AEG manufacturing to a network of qualified contract manufacturers already in place. In November 200 7, 730 employees were notified of their termination, 708 in manufacturing, 20 in research and development and 2 in selling, general, and administrative. As of December 31, 2008, all employees had been terminated. Restructuring and other related charges of approximately $3.7 million related to this restructuring plan, of which $3.6 million was recorded in fiscal 2008 and $0.1 million recorded in fiscal 2009 ~~and included~~ in discontinued operations for the periods presented. The total restructuring charges of $3.7 million consist of $1.4 million for the write-off of facilities and equipment and accelerated depreciation, $1.4 million for severance and benefits, and $0.9 millionan effort to reduce its cost structure in ~~professional and administrative and other fees. All restructuring and other related charges under this plan have been recorded as of March 31, 2009 and all amounts have been paid.~~

~~Q3 Fiscal 2009 Restructuring Action~~

~~In the third quarter of fiscal 2009, the Company had a reduction in force at AEG’s operations in Luxemburg and Shenzhen, China and ACG’s operations in China as part~~light of the ~~strategic initiative designed to reduce costs. A total~~expected impact of ~~624 employees were notified~~the global economic recession on the Company's business and revenues. These actions consisted of ~~their termination, all of whom had been terminated as of December 31, 2009. On January 14, 2009, the Company announced additional~~ reductions in force related to this restructuring plan which included an additional 199 employees located in ACG’s Tijuana, Mexico, U.S., and other global locations who were notified of their termination. An additional three employees were notified of their termination in the first quarter of fiscal 2010. A total of 826 employees, primarily in operations positions but also including other fu nctions, were notified of their termination under this restructuring action,throughout all of ~~whom, except ten employees, had been terminated as of March 31, 2009. In fiscal 2009,~~ the Company recorded $8.8 million of Restructuring and other charges for these activities, of which $0.8 million related to the AEG segment and is included in discontinued operations and $8.0 million related to the ACG segment. These costs primarily consisted of $8.1 million in severance and benefits and $0.6 million for the write-off of leasehold improvements due to consolidation of facilities. All costs had been recorded and paid as of March 31, 2010.

~~Q4 Fiscal 2009 Restructuring Action~~

~~At the end of the fourth quarter of fiscal 2009, the Company announced~~Company's geographies along with a plan to close ~~our ACG~~its manufacturing operations in ~~our~~its Suzhou, China facility due to the decision to outsource the manufacturing of ~~our~~ Bluetooth products to a third party supplier in China. ~~A total~~The Company exited the manufacturing portion of ~~656~~the facility in July 2009 at which time the remaining assets were classified as Assets held for sale on the Consolidated balance sheet. Approximately 1,500 employees ~~primarily in operations positions but also including other~~from functions across the Company were notified of their termination under these actions and substantially all of ~~which 623~~these employees have been terminated as of March 31, ~~2010. The remaining employees are expected to terminate throughout fiscal~~ 2011.

~~In fiscal 2009,~~

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As a result of these restructuring actions, the Company recorded ~~$3.0~~approximately $1.9 million ~~of Restructuring~~ and ~~other charges related to this action, primarily consisting of severance and benefits. In fiscal 2010, the Company recorded an additional $1.9~~$11.0 million of Restructuring and other related charges during the years ended March 31, 2010 and 2009, respectively, consisting ~~of $0.8 million~~ of severance and benefits ~~and $1.1 million of non-cash charges including $0.7 million for the acceleration of depreciation on building~~along with facilities and equipment associated with research and development and administrative functions due to the change in the assets’ useful lives as a result of the assets being taken out of service prior to their original service period and $0.4 million of additional loss on Assets held for sale.charges. In addition, ~~in fiscal~~during the year ended March 31, 2010, the Company recorded non-cash charges of $5.2 million for accelerated ~~depreciatio n~~depreciation related to the building and equipment associated with manufacturing operations which is included in Cost of revenues. ~~To date,~~There were no charges during the year ended March 31, 2011; however, in the third quarter of fiscal 2011, the Company completed the sale of its Suzhou facility, which was classified as Assets held for sale, resulting in an immaterial net gain which was recorded in Restructuring and other related charges.

As of March 31, 2011, the Company has recorded a total of ~~$10.1~~$17.7 million of costs related to ~~this action: $4.9 million in Restructuring and related charges~~these actions, which ~~include $3.8~~includes $11.2 million of severance and benefits ~~$0.7~~and $6.9 million ofin non-cash charges related to accelerated depreciation charges, the write-off of facilities and ~~$0.4 million~~equipment and impairment loss on Assets held for sale, offset in part by a $0.4 million net gain on the final sale of the Suzhou facility. All of these costs and the gain on sale were recorded in Restructuring and other related charges, with the exception of $5.2 million of accelerated depreciation which was recorded in Cost of ~~revenues for accelerated depreciation. Substantially all~~revenues. All the costs related to ~~this action~~these actions have been ~~recorded~~paid as of March 31, ~~2010 and the remaining payments will be made throughout fiscal~~ 2011.

11. COMMITMENTS AND CONTINGENCIES

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~~The following table summarizes the Company’s restructuring activities during fiscal years 2009 and 2010 and the restructuring accrual as of the end of each fiscal year:~~

(in thousands) Severance and Benefits Facilities and Equipment Other Total

Restructuring accrual at March 31, 2008 $ 292 $ - $ 514 $ 806

Restructuring and other related charges - continuing operations 10,269 581 102 10,952
Restructuring and other related charges - discontinued operations 1,077 (36 ) 81 1,122
Cash payments (6,170 ) 107 (712 ) (6,775 )
Non-cash - (535 ) - (535 )
Restructuring accrual at March 31, 2009 5,468 117 (15 ) 5,570

Restructuring and other related charges - continuing operations 832 1,050 (15 ) 1,867
Restructuring and other related charges - discontinued operations 19 - - 19
Cash payments (6,229 ) - (67 ) (6,296 )
Non-cash 75 (1,167 ) 97 (995 )
Restructuring accrual at March 31, 2010 $ 165 $ - $ - $ 165

~~The restructuring accrual is included in accrued liabilities in the Company’s consolidated balance sheet.~~

~~11.~~

~~COMMITMENTS AND CONTINGENCIES~~

MINIMUM FUTURE RENTAL PAYMENTS. The Company leases certain equipment and facilities under operating leases expiring in various years through fiscal 2017. Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of March 31, ~~2010~~2011 are as follows:


Fiscal Year Ending March 31,	(in thousands)		(in thousands)

2011	$	4,598
2012		2,349	$	4,340
2013		2,147	3,936
2014		1,682	3,431
2015		1,112	1,407
2016			711
Thereafter		687	87
Total minimum future rental payments	$	12,575	$	13,912

Total consolidated rent expense for operating leases included in both continuing and discontinued operations was approximately ~~$6.4~~$5.6 million, ~~$6.9~~$6.0 million, and ~~$6.0~~$6.9 million in fiscal ~~2008, 2009~~2011, 2010 and ~~2010,~~2009, respectively.

EXISTENCE OF RENEWAL OPTIONS. Certain operating leases provide for renewal options for periods from one to three years. In the normal course of business, operating leases are generally renewed or replaced by other leases.

INDEMNIFICATIONS. Under the terms of the Asset Purchase Agreement, dated October 2, 2009, a First Amendment to the Asset Purchase Agreement, dated November 30, 2009, a Side Letter to the Asset Purchase Agreement, dated January 8, 2010, and a second Side Letter to the Asset Purchase Agreement, dated February 15, 2010 (collectively, the “Purchase Agreement”) to sell Altec Lansing, the Company’s AEG segment, the Company agreed to indemnify the purchaser following the closing of the transaction up to its one year anniversary against specified losses in connection with the AEG business and generally retain responsibility for various legal liabilities that may accrue. The Company also made representations and warranties to the purchaser about the condition of AEG, including matters relating to ~~intellec tual~~intellectual property, employee matters and environmental laws. No indemnification costs have been recorded as of March 31, 2011 or March 31, 2010.

OTHER GUARANTEES AND OBLIGATIONS. As is customary in the Company’s industry, as provided for in local law in the U.S. and other jurisdictions, Plantronics’ standard contracts provide remedies to its customers, such as defense, settlement, or payment of judgment for intellectual property claims related to the use of its products. From time to time, the Company indemnifies customers against combinations of loss, expense, or liability arising from various trigger events relating to the sale and use of its products and services. In addition, Plantronics also provides protection to customers against claims related to undiscovered liabilities, additional product liability, or environmental obligations. In the Company’s experience, claims made under these indemnifications are rare and the associated estimated fair value of the liability is not material.

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CLAIMS AND LITIGATION. Six class action lawsuits have been filed against the Company alleging that its Bluetooth headsets may cause noise-induced hearing loss. Shannon Wars et al. vs. Plantronics, Inc. was filed on November 14, 2006 in the U.S. District Court for the Eastern District of Texas. Lori Raines, et al. vs. Plantronics, Inc. was filed on October 20, 2006 in the U.S. District Court, Central District of California. Kyle Edwards, et al vs. Plantronics, Inc. was filed on October 17, 2006 in the U.S. District Court, Middle District of Florida. Ralph Cook vs. Plantronics, Inc. was filed on February 8, 2007 in the U.S. District Court for the Eastern District of Virginia. Randy Pierce vs. Plantronics, Inc. was filed on January 10, 2007 in the U.S. District Court for the Eastern District of Arkansas. Bruce Schiller, et al vs. Plantronics, Inc. was filed on October 10, 2006 in the Superior Court of the State of California in and for the County of Los Angeles. The complaints state that they do not seek damages for personal injury to any individual. These complaints seek various remedies, including injunctive relief requiring the Company to include certain additional warnings with its Bluetooth headsets and to redesign the headsets to limit the volume produced, or, alternatively, to provide the user with ~~th e~~the ability to determine the level of sound emitted from the headset. Plaintiffs also seek unspecified general, special, and punitive damages, as well as restitution. The federal cases have been consolidated for all pre-trial purposes in the U.S. District Court for the Central District of Los Angeles before Judge Fischer. The California State Court case was dismissed by the plaintiffs. The parties agreed in principle to settle their claims. The U.S. District Court for the Central District of Los Angeles signed an order approving the final settlement of the lawsuit entitled In Re Bluetooth Headset Products Liability Litigation brought against Plantronics, Inc., Motorola, Inc and GN Netcom, Inc. alleging that the three companies failed to adequately warn consumers of the potential for long term noise induced hearing loss if they used Bluetooth ~~he adsets.~~ headsets. The companies contested the claims of the lawsuit but settled the lawsuit on a nationwide basis for an amount which the Company believes is less than the cost of litigating and winning the lawsuit. On September 25, 2009, the Court signed a judgment in the case resolving all matters except the issue of outstanding attorneys’ fees, which will be split among the three defendants. On October 22, 2009, the Court issued an order setting the class counsel’s attorneys’ fees and costs and the incentive award at the maximum amounts agreed to by the parties in their settlement. The objectors to the settlement have filed a notice of appeal, and the appeal is in process. The Company believes that any loss related to these proceedings would not be material and have adequately reserved for these costs in the consolidated financial statements.

In addition, the Company is presently engaged in various legal actions arising in the normal course of business. The Company believes that it is unlikely that any of these actions will have a material adverse impact on its operating results; however, because of the inherent uncertainties of litigation, the outcome of any of these actions could be unfavorable and could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

12. STOCKHOLDERS' EQUITY

~~12.~~

~~STOCKHOLDERS’ EQUITY~~

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income were as follows:


	March 31,				March 31,
(in thousands)	2009		2010		2011			2010

Accumulated unrealized gain on cash flow hedges, net of tax of $400 and $100, respectively	$	6,334	$	2,705

Accumulated unrealized gain (loss) on cash flow hedges, net of tax of $100 and $100, respectively					$	(3,715	)	$	2,705
Accumulated foreign currency translation adjustments		2,521		3,567	5,181			3,567

Accumulated unrealized gain on investments, net of tax					7			—
Accumulated other comprehensive income	$	8,855	$	6,272	$	1,473		$	6,272

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(in thousands, except earnings per share data)	Fiscal Year Ended March 31,
	2011		2010			2009 ¹
Income from continuing operations, net of tax	$	109,243	$	76,453		$	45,342
Loss on discontinued operations, net of tax	—		(19,075		)	(110,241		)
Net income (loss)	$	109,243	$	57,378		$	(64,899	)

Weighted average shares-basic	47,713		48,504			48,589
Dilutive effect of employee equity incentive plans	1,631		827			358
Weighted average shares-diluted	49,344		49,331			48,947

Earnings (loss) per common share
Basic
Continuing operations	$	2.29	$	1.58		$	0.93
Discontinued operations	—		(0.39		)	(2.27		)
Net income (loss)	$	2.29	$	1.18		$	(1.34	)

Diluted
Continuing operations	$	2.21	$	1.55		$	0.93
Discontinued operations	—		(0.39		)	(2.25		)
Net income (loss)	$	2.21	$	1.16		$	(1.33	)

Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive	1,606		4,902			7,521

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~~In the first~~fourth quarter of fiscal 2009, the Company announced a reduction in force in AEG’s operations in Milford, Pennsylvania as part the strategic initiative to reduce costs. As a result of these activities, $0.2 million in restructuring and other related charges was recorded in the first quarter of fiscal 2009 and are included in discontinued operations.2011.

In the third quarter of fiscal 2009, the Company recorded non-cash impairment charges in the amount of $117.5 million which consisted of $54.7 million related to the goodwill arising from the purchase of Altec Lansing in August 2005, $58.7 million related to intangible assets primarily associated with the Altec Lansing trademark and trade name and $4.1 million related to property, plant and equipment related to the AEG segment. These charges are included in discontinued operations.

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In the third quarter of fiscal 2009, the Company announced a reduction in force in AEG’s operation in Luxemburg and Shenzhen, China and ACG’s operations in China, Mexico and various other worldwide locations. As a result of these activities, $0.7 million and $0.1 million in restructuring and other related charges in discontinued operations was recorded in the third and fourth quarters of fiscal 2009, and $0.3 million and $7.7 million in restructuring and other related charges in continuing operations was recorded in the third and fourth quarters of fiscal 2009, respectively.

In March 2009, the Company announced a restructuring plan to close its ACG Suzhou, China manufacturing operations in fiscal 2010 in order to outsource manufacturing of its Bluetooth products to an existing supplier in China. The manufacturing facility was closed in July 2009. As a result of these activities, $3.0 million in restructuring and other related charges was recorded as part of continuing operations in the fourth quarter of fiscal 2009. In the first, second, third and fourth quarters of fiscal 2010, additional restructuring and other related charges of $0.6 million, $0.9 million, $0.3 million and $0.1 million ~~respectively,~~ were recorded as part of this ~~action. In addition,~~action in the first, second, third and fourth quarters of fiscal 2010, respectively. The Company also recorded non-cash charges of $3.5 million and $1.7 million, respectively, in the first and second quarters of fiscal ~~201 0~~2010 related to accelerated depreciation related to the building and equipment associated with manufacturing operations and is included in Cost of revenues. In the third quarter of fiscal 2011, the Company recorded an immaterial net gain in Restructuring and other related charges upon completion of the sale of its Suzhou facility which was classified as Assets held for sale.

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On May 4, 2010, the Company issued a press release announcing our preliminary results for the fourth quarter of fiscal 2010. In the press release, the Company reported Income from discontinued operations, net of tax, of $0.2 million and Net income of $24.6 million. Subsequent to the issuance of the press release, management recorded an adjustment related to its discontinued operations resulting in a Loss on discontinued operations, net of tax, of $0.2 million and Net income of $24.2 million for the fourth quarter of fiscal 2010.

⁴

In the second quarter of fiscal 2010, the Company recorded non-cash impairment charges in the amount of $18.6 million on the Altec Lansing trademark and trade name, $2.8 million related to intangible assets related to customer relationships, technology and the inMotion trade name, and $3.8 million related to property, plant and equipment related to the AEG segment. These charges are included in discontinued operations.

⁵

The first quarter of fiscal 2010 includes a correcting adjustment of approximately $1.3 million in Cost of revenues related to an overstatement of duty expense in prior periods, beginning in the third quarter of fiscal 2005 through the fourth quarter of fiscal 2009. The Company assessed the materiality of the error utilizing SEC Staff Accounting Bulletin No. 99, “Materiality” and SEC Staff Accounting Bulletin No. 108, “Effects of Prior Year Misstatements on Current Year Financial Statements”, and determined that the impact of the correcting adjustment was not material to its projected full year results for fiscal 2010 nor did it have a material impact on amounts reported in prior periods.

As originally reported in fiscal 2009, potentially dilutive common shares attributable to employee stock plans diluted shares were excluded from the diluted share calculation as they would have been anti-dilutive and would have reduced the net loss per share; however, as a result of reporting our AEG segment as discontinued operations, the anti-dilution of these potentially dilutive common shares is now based on income from continuing operations as compared to net income (loss) and are now included in the shares used in diluted per share calculation.

⁶

10	The Company sold Altec Lansing, its AEG segment, effective December 1, 2009 and has classified the AEG operating results, including the loss on sale, as discontinued operations for all periods presented.

11
⁷	Net income (loss) includes the operating results from both continuing and discontinued operations.

12
⁸	Basic and diluted earnings per share is presented on net income (loss) including both continuing and discontinued operations and are computed independently for each of the quarters presented; therefore, the sum of the quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.

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ITEMITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no disagreements with accountants on any matter of accounting principles and practices or financial disclosure.

ITEMITEM 9A. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective at the reasonable assurance level to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to Plantronics’ management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Our disclosure controls and procedures include components of our internal control over financial reporting. Management’s assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance because a control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, our management has concluded that, our internal control over financial reporting was effective as of April ~~3, 2010.~~2, 2011. The ~~Company 217;s~~Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has issued an audit report on our internal control over financial reporting which appears on page 5046 of this Form 10-K.

Changes in internal control over financial reporting

There has been no change in our internal control over financial reporting during the fourth quarter of fiscal ~~2010~~2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEMITEM 9B. OTHER INFORMATION

None.

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PART III

ITEMITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information regarding the identification and business experience of our directors under the captions "Nominees" and “Business Experience of Directors” under the main caption "Proposal One – Election of Directors" in our definitive ~~2010~~2011 Proxy Statement for the annual meeting of stockholders to be held on ~~July 27, 2010~~or about August 5, 2011 (“~~2010~~2011 Proxy Statement”), expected to be filed with the Securities and Exchange Commission on or about June ~~11, 2010~~22, 2011 is incorporated in this Item 10 by reference. For information regarding the identification and business experience of our executive officers, see "Employees" at the end of Item 1 in Part I of this Annual Report on Form 10-K. Information regarding the standing audit committee and names of the financial expert(s) in the audit committee, under the caption "Corporate Governance” subhead ~~“Audit~~��Audit Committee" in our ~~2010~~2011 Proxy Statement is incorporated into this Item 10 by reference. Information concerning filing requirements applicable to our executive officers and directors under the caption "Section 16(a) Beneficial Ownership Reporting Compliance” in our ~~2010~~2011 Proxy Statement is incorporated into this Item 10 by reference.

Code of Ethics

Plantronics has adopted a ~~Worldwide~~ Code of ~~Business~~ Conduct ~~and Ethics~~ (the “Code”), which applies to all Plantronics’ employees, including directors and officers. The Code is posted on the Plantronics’ corporate website under the Corporate Governance section of Investor Relations portal (www.plantronics.com). We intend to disclose future amendments to the Code, or any waivers of such provisions granted to executive officers and directors, on this web site within four business days following the date of such amendment or waiver.

Stockholders may request a free copy of the Code from our Investor Relations department as follows:

Plantronics, Inc.

345 Encinal Street

Santa Cruz, California 95060

Attn: Investor Relations

(831) 426-5858

Corporate Governance Guidelines

Plantronics has adopted the Corporate Governance Guidelines, which are available on Plantronics' website under the Corporate Governance section of the Investor Relations portal (www.plantronics.com). Stockholders or any interested party may request a free copy of the Corporate Governance Guidelines from the address and phone numbers set forth above under “Code of Ethics.”

ITEM 11. EXECUTIVE COMPENSATION

IT~~EM 11. EXECUTIVE COMPENSATION~~

The information required under this item is included under the captions "Executive Compensation", "Compensation of Directors", “Report of the Compensation Committee of the Board of Directors” and “Compensation Committee Interlocks and Insider Participation” in our ~~2010~~2011 Proxy Statement and is incorporated herein by reference.

ITEMITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is included under the captions “Equity Compensation Plan Information” under the main caption “Proposal Two – Approval of ~~Amendment~~Amendments to the 2003 Stock Plan”, and "Security Ownership of Principal Stockholders and Management" under the main caption "Additional Information" in our ~~2010~~2011 Proxy Statement and is incorporated into this Item 12 by this reference.

~~Table of Contents~~

~~ITE~~MITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is included under the caption "Corporate Governance” subhead “Director Independence" in the ~~2010~~2011 Proxy Statement and is incorporated into this Item 13 by this reference.

ITEM

Table of Contents

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is included under the caption "Proposal ~~Three~~Four - Ratification of Appointment of Independent Registered Public Accounting Firm" in our ~~2010~~2011 Proxy Statement and is incorporated in this Item 14 by this reference.

Table of Contents

PART IV

ITEM

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Annual Report on Form 10-K:


(1)	Financial Statements. The following consolidated financial statements and supplementary information and Report of Independent Registered Public Accounting Firm are included in Part II of this Report.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



	page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	50 46

CONSOLIDATED BALANCE SHEETS AT MARCH 31, ~~2010~~2011 AND ~~2009~~ 2010	51 47

CONSOLIDATED STATEMENTS OF OPERATIONS FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 31, ~~2010~~ 2011	52 48

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 31, ~~2010~~ 2011	53 49

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 31, ~~2010~~ 2011	54 50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	55 51

Table of Contents


(2)	Financial Statement Schedules.

PLANTRONICS, INC.

SCHEDULE II: VALUATION AND QUALIFYING

ACCOUNTS AND RESERVES

(in thousands)

Balance at Beginning of Year Charged to Expenses or Other Accounts Deductions Balance at End of Year

Allowance for doubtful accounts:
Year ended March 31, 2008 $ 5,078 $ (232 ) $ (3,111 ) $ 1,735
Year ended March 31, 2009 1,735 1,784 (535 ) 2,984
Year ended March 31, 2010 2,984 130 (1,268 ) 1,846

Provision for returns:
Year ended March 31, 2008 $ 7,838 $ 27,668 $ (25,632 ) $ 9,874
Year ended March 31, 2009 9,874 25,731 (28,013 ) 7,592
Year ended March 31, 2010 7,592 30,417 (24,197 )1 13,812

Provision for promotions, rebates and other:
Year ended March 31, 2008 $ 23,057 $ 52,915 $ (48,076 ) $ 27,896
Year ended March 31, 2009 27,896 49,471 (54,406 ) 22,961
Year ended March 31, 2010 22,961 41,237 (50,418 )1 13,780

Warranty reserves:
Year ended March 31, 2008 $ 7,240 $ 22,095 $ (18,894 ) $ 10,441
Year ended March 31, 2009 10,441 21,595 (19,612 ) 12,424
Year ended March 31, 2010 12,424 14,482 (15,900 )1 11,006



	Balance at Beginning of Year		Charged to Expenses or Other Accounts			Deductions				Balance at End of Year
Provision for doubtful accounts and sales allowances:
Year ended March 31, 2011	$	2,279	$	(8	)	$	(1,320	)		$	951
Year ended March 31, 2010	4,011		(243		)	(1,489		)		2,279
Year ended March 31, 2009	2,348		2,698			(1,035		)		4,011

Provision for returns:
Year ended March 31, 2011	$	13,812	$	21,910		$	(25,285	)		$	10,437
Year ended March 31, 2010	7,592		30,417			(24,197		)	¹	13,812
Year ended March 31, 2009	9,874		25,731			(28,013		)		7,592

Provision for promotions, rebates and other:
Year ended March 31, 2011	$	13,780	$	36,885		$	(40,205	)		$	10,460
Year ended March 31, 2010	22,961		41,237			(50,418		)	¹	13,780
Year ended March 31, 2009	27,896		49,471			(54,406		)		22,961

Warranty reserves:
Year ended March 31, 2011	$	11,006	$	14,769		$	(14,759	)		$	11,016
Year ended March 31, 2010	12,424		14,482			(15,900		)	¹	11,006
Year ended March 31, 2009	10,441		21,595			(19,612		)		12,424


¹	Deductions include the following amounts assumed by the purchaser as part of the sale of Altec Lansing on December 1, ~~2009:~~2009:



Provision for returns	$	(1,440	)
Provision for promotions, rebates and other	$	(3,284	)
Warranty reserves	$	(383	)

All other schedules have been omitted because the required information is not present or not present in the amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements or notes thereto.

Table of Contents

3. Exhibits. See Item 15(b) below.

(b) Exhibits

We have filed, or incorporated by reference into this Report, the exhibits listed on the accompanying Index to Exhibits immediately following the signature page of this Form 10-K.

See Items 8 and 15(a) (2) above.

Table of Contents

SI~~GNATURES~~SIGNATURES

Pursuant to the requirements ~~of Section 13 or 15(d)~~ of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned ~~thereunto~~hereunto duly authorized.




May 31, 2011	PLANTRONICS, INC.
~~June 1, 2010~~
	By:	/s/ Ken Kannappan
	Name:	Ken Kannappan
	Title:	Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned officers and directors of Plantronics, Inc., a Delaware corporation, do hereby constitute and appoint Ken Kannappan and Barbara Scherer, or either of them, the lawful attorney-in-fact, with full power of substitution, for him in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.



Signature	Title	Date

/s/ Ken Kannappan (Ken Kannappan)	President, Chief Executive Officer and Director (Principal Executive Officer)	~~June 1, 2010~~May 31, 2011

/s/ Barbara Scherer (Barbara Scherer)	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	~~June 1, 2010~~May 31, 2011

/s/ Marv Tseu (Marv Tseu)	Chairman of the Board and Director	~~June 1, 2010~~May 31, 2011

/s/ Brian Dexheimer (Brian Dexheimer)	Director	~~June 1, 2010~~May 31, 2011

/s/ Gregg Hammann (Gregg Hammann)	Director	~~June 1, 2010~~May 31, 2011

/s/ John Hart (John Hart)	Director	~~June 1, 2010~~May 31, 2011

/s/ Marshall Mohr (Marshall Mohr)	Director	~~June 1, 2010~~May 31, 2011

/s/ Roger Wery (Roger Wery)	Director	~~June 1, 2010~~May 31, 2011

Table of Contents

EXHIBITS INDEX

Incorporation by Reference
Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith

2.1 Asset Purchase Agreement, dated October 2, 2009, by and among Plantronics, Inc., Plantronics, B.V., and Audio Technologies Acquisition, LLC. 10-Q 001-12696 2.1 1/27/2010

2.1.1 First Amendment to Asset Purchase Agreement, dated November 30, 2009, by and among Plantronics, Inc., Plantronics, B.V., Altec Lansing, LLC (f/k/a Audio Technologies Acquisition, LLC) and Audio Technologies Acquisition B.V. 10-Q 001-12696 2.1.1 1/27/2010

2.1.2 Side Letter, dated January 8, 2010, to the Asset Purchase Agreement, dated October 2, 2009, by and among Plantronics, Inc., Plantronics, B.V., and Audio Technologies Acquisition, LLC., as amended by that certain First Amendment to Asset Purchase Agreement, dated November 30, 2009, by and among Plantronics, Inc., Plantronics, B.V., Altec Lansing, LLC (f/k/a Audio Technologies Acquisition, LLC), and Audio Technologies Acquisition B.V. 10-Q 001-12696 2.1.2 1/27/2010

2.1.3 Side Letter, dated February 15, 2010, to the Asset Purchase Agreement, dated October 2, 2009, by and among Plantronics, Inc., Plantronics, B.V., and Audio Technologies Acquisition, LLC., as amended by that certain First Amendment to Asset Purchase Agreement, dated November 30, 2009, by and among Plantronics, Inc., Plantronics, B.V., Altec Lansing, LLC (f/k/a Audio Technologies Acquisition, LLC), and Audio Technologies Acquisition B.V. X

3.1.1 Amended and Restated By-Laws of the Registrant 8-K 001-12696 3(ii) 1/20/2009

3.2.1 2009 Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on January 20, 2009 8-K 001-12696 3(i) 1/20/2009

3.3 Registrant’s Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 1, 2002 8-A 001-12696 3.6 3/29/2002

4.1 Preferred Stock Rights Agreement, dated as of March 13, 2002 between the Registrant and Equiserve Trust Company, N.A., including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively 8-A 001-12696 4.1 3/29/2002

10.1* Plantronics, Inc. Non-EMEA Quarterly Profit Sharing Plan 10-K 001-12696 10.1 6/1/2001

10.2* Indemnification Agreement between the Registrant and certain directors and executives 10-K 001-12696 10.2 5/31/2005

10.3.1* Executive Incentive Plan, dated May 8, 2009, as amended 10-K 001-12696 10.3.4 5/26/2009

10.4.1 Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) 10-Q 001-12696 10.5.1 8/6/2004

10.4.2 Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) 10-Q 001-12696 10.5.2 8/6/2004

10.4.3 Lease Agreement dated October 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) 10-Q 001-12696 10.5.4 8/6/2004

10.5 Lease dated December 7, 1990 between Canyge Bicknell Limited and Plantronics Limited, a subsidiary of the Registrant, for premises located in Wootton Bassett, The United Kingdom S-1 10.32 10/20/1993

10.6* Amended and Restated 2003 Stock Plan 14-A 001-12696 6/12/2009

10.7* 1993 Stock Option Plan 10-K 001-12696 10.8 6/21/2002

10.8.1* 1993 Director Stock Option Plan S-1 10.29 10/20/1993



		Incorporation by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
2.1	Asset Purchase Agreement, dated October 2, 2009, by and among Plantronics, Inc., Plantronics, B.V., and Audio Technologies Acquisition, LLC.	10-Q	001-12696	2.1	1/27/2010

2.1.1	First Amendment to Asset Purchase Agreement, dated November 30, 2009, by and among Plantronics, Inc., Plantronics, B.V., Altec Lansing, LLC (f/k/a Audio Technologies Acquisition, LLC) and Audio Technologies Acquisition B.V.	10-Q	001-12696	2.1.1	1/27/2010

2.1.2	Side Letter, dated January 8, 2010, to the Asset Purchase Agreement, dated October 2, 2009, by and among Plantronics, Inc., Plantronics, B.V., and Audio Technologies Acquisition, LLC., as amended by that certain First Amendment to Asset Purchase Agreement, dated November 30, 2009, by and among Plantronics, Inc., Plantronics, B.V., Altec Lansing, LLC (f/k/a Audio Technologies Acquisition, LLC), and Audio Technologies Acquisition B.V.	10-Q	001-12696	2.1.2	1/27/2010

2.1.3	Side Letter, dated February 15, 2010, to the Asset Purchase Agreement, dated October 2, 2009, by and among Plantronics, Inc., Plantronics, B.V., and Audio Technologies Acquisition, LLC., as amended by that certain First Amendment to Asset Purchase Agreement, dated November 30, 2009, by and among Plantronics, Inc., Plantronics, B.V., Altec Lansing, LLC (f/k/a Audio Technologies Acquisition, LLC), and Audio Technologies Acquisition B.V.	10-K	001-12696	2.1.3	6/1/2010

3.1.1	Amended and Restated By-Laws of the Registrant	8-K	001-12696	3(ii)	1/20/2009

3.2.1	2009 Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on January 20, 2009	8-K	001-12696	3(i)	1/20/2009

3.3	Registrant’s Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 1, 2002	8-A	001-12696	3.6	3/29/2002

4.1	Preferred Stock Rights Agreement, dated as of March 13, 2002 between the Registrant and Equiserve Trust Company, N.A., including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively	8-A	001-12696	4.1	3/29/2002

10.1*	Indemnification Agreement between the Registrant and certain directors and executives	10-K	001-12696	10.2	5/31/2005

10.2.2*	Executive Incentive Plan, dated May 8, 2009, as Amended September 10, 2010	8-K	001-12696	10.1	9/16/2010

10.3.1	Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original)	10-Q	001-12696	10.5.1	8/6/2004

10.3.2	Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original)	10-Q	001-12696	10.5.2	8/6/2004

10.4	Lease dated December 7, 1990 between Canyge Bicknell Limited and Plantronics Limited, a subsidiary of the Registrant, for premises located in Wootton Bassett, The United Kingdom	S-1		10.32	10/20/1993

Table of Contents

Incorporation by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

10.5*

Amended and Restated 2003 Stock Plan

8-K

001-12696

10.1

7/29/2010

10.6*

1993 Stock Option Plan

10-K

001-12696

10.8

6/21/2002

10.7.1*

1993 Director Stock Option Plan

S-1

10.29

10/20/1993

10.7.2*

Amendment to the 1993 Director Stock Option Plan

S-8

333-14833

4.4

10/25/1996

10.7.3*

Amendment No. 2 to the 1993 Director Stock Option Plan

10-K

001-12696

10.9(a)

6/1/2001

10.7.4 *

Amendment No. 3 to the 1993 Director Stock Option Plan

10-K

001-12696

10.9(b)

6/1/2001

10.7.5*

Amendment No. 4 to the 1993 Director Stock Option Plan

10-K

001-12696

10.9.5

6/21/2002

10.8.1*

Plantronics, Inc. 2002 Amended and Restated Employee Stock Purchase Plan, effective as of July 29, 2009, as approved by the Plantronics Board of Directors on January 14, 2010

10-K

001-12696

10.9.1

6/1/2010

10.8.2

Trust Agreement Establishing the Plantronics, Inc. Annual Profit Sharing/Individual Savings Plan Trust

S-8

333-19351

4.3

1/7/1997

10.9.1*

Plantronics, Inc. Basic Deferred Compensation Plan, as amended August 8, 1996

S-8

333-19351

4.5

3/25/1997

10.9.2

Trust Agreement Under the Plantronics, Inc. Basic Deferred Stock Compensation Plan

S-8

333-19351

4.6

3/25/1997

10.9.3

Plantronics, Inc. Basic Deferred Compensation Plan Participant Election

S-8

333-19351

4.7

3/25/1997

10.10.1*

Second Amended and Restated Employment Agreement dated on November 17, 2009 between Registrant and Ken Kannappan

10-K

001-12696

10.11.1

6/1/2010

10.10.2*

Employment Agreement dated as of November 1996 between Registrant and Don Houston

10-K

001-12696

10.14.2

6/2/2003

10.10.3*

Employment Agreement dated as of March 1997 between Registrant and Barbara Scherer

10-K

001-12696

10.14.4

6/2/2003

10.10.4*

Employment Agreement dated as of June 2003 between Registrant and Philip Vanhoutte

10-K

001-12696

10.12.4

5/31/2005

10.10.5*

Form of Change of Control Severance Agreement, dated on or about January 26, 2009, between Registrant, Barbara Scherer, Don Houston, Rich Pickard and Renee Niemi

8-K

001-12696

10.1

1/30/2009

10.11

Standby Letter of Credit Agreement dated as of March 31, 2009 between Registrant, Plantronics BV and Wells Fargo Bank N.A.

10-K

001-12696

10.13.6

5/26/2009

10.12**

Second Amended and Restated Development and Manufacturing Agreement, dated March 20, 2009, between Plantronics, B.V., and GoerTek, Inc.

10-K

001-12696

10.15

5/26/2009

10.13

Contract for the Transfer of Factory Building and the Land-Use Right, Dated July 23, 2010

10-Q

001-12696

10.1

11/4/2010

Subsidiaries of the Registrant

Consent of Independent Registered Public Accounting Firm

Table of Contents

Incorporation by Reference
Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith

10.8.2* Amendment to the 1993 Director Stock Option Plan S-8 333-14833 4.4 10/25/1996

10.8.3* Amendment No. 2 to the 1993 Director Stock Option Plan 10-K 001-12696 10.9(a) 6/1/2001

10.8.4 * Amendment No. 3 to the 1993 Director Stock Option Plan 10-K 001-12696 10.9(b) 6/1/2001

10.8.5* Amendment No. 4 to the 1993 Director Stock Option Plan 10-K 001-12696 10.9.5 6/21/2002

10.9.1* Plantronics, Inc. 2002 Amended and Restated Employee Stock Purchase Plan, effective as of July 29, 2009, as approved by the Plantronics Board of Directors on January 14, 2010 X

10.9.2 Trust Agreement Establishing the Plantronics, Inc. Annual Profit Sharing/Individual Savings Plan Trust S-8 333-19351 4.3 1/7/1997

10.10.1* Plantronics, Inc. Basic Deferred Compensation Plan, as amended August 8, 1996 S-8 333-19351 4.5 3/25/1997

10.10.2 Trust Agreement Under the Plantronics, Inc. Basic Deferred Stock Compensation Plan S-8 333-19351 4.6 3/25/1997

10.10.3 Plantronics, Inc. Basic Deferred Compensation Plan Participant Election S-8 333-19351 4.7 3/25/1997

10.11.1* Second Amended and Restated Employment Agreement dated on November 17, 2009 between Registrant and Ken Kannappan X

10.11.2* Employment Agreement dated as of November 1996 between Registrant and Don Houston 10-K 001-12696 10.14.2 6/2/2003

10.11.3* Employment Agreement dated as of March 1997 between Registrant and Barbara Scherer 10-K 001-12696 10.14.4 6/2/2003

10.11.4* Employment Agreement dated as of June 2003 between Registrant and Philip Vanhoutte 10-K 001-12696 10.12.4 5/31/2005

10.11.5* Form of Change of Control Severance Agreement, dated on or about January 26, 2009, between Registrant, Barbara Scherer, Don Houston, Rich Pickard and Renee Niemi 8-K 001-12696 10.1 1/30/2009

10.12 Standby Letter of Credit Agreement dated as of March 31, 2009 between Registrant, Plantronics BV and Wells Fargo Bank N.A. 10-K 001-12696 10.13.6 5/26/2009

10.13** Second Amended and Restated Development and Manufacturing Agreement, dated March 20, 2009, between Plantronics, B.V., and GoerTek, Inc. 10-K 001-12696 10.15 5/26/2009

14 Worldwide Code of Business Conduct and Ethics X

21 Subsidiaries of the Registrant X

23 Consent of Independent Registered Public Accounting Firm X

24 Power of Attorney – Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K.)

31.1 Certification of the President and CEO Pursuant to Rule 13a-14(a)/15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X

31.2 Certification of Senior VP, Finance and Administration, and CFO Pursuant to Rule 13a-14(a)/15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X

32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X

* Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.
** Confidential treatment has been granted with respect to certain portions of this Exhibit.

Incorporation by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

Power of Attorney – Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K.)

31.1

Certification of the President and CEO Pursuant to Rule 13a-14(a)/15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Senior VP, Finance and Administration, and CFO Pursuant to Rule 13a-14(a)/15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101 INS***

XBRL Instance Document

101 SCH***

XBRL Taxonomy Extension Schema Document

101 CAL***

XBRL Taxonomy Extension Calculation Linkbase Document

101 LAB***

XBRL Taxonomy Extension Label Linkbase Document

101 PRE***

XBRL Taxonomy Extension Presentation Linkbase Document

101 DEF***

XBRL Taxonomy Definition Linkbase Document

Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.

Confidential treatment has been granted with respect to certain portions of this Exhibit.

****

In accordance with Rule 406T of Reguation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, is deemed not filed for purposed of Section 18 of the Exchange Act of 1934, and othewise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.



Delaware		77-0207692
	(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

	345 Encinal Street, Santa Cruz, California		95060
	(Address of principal executive offices)		(Zip Code)



Title of each class		Name of each exchange on which registered

	COMMON STOCK, $.01 PAR VALUE		NEW YORK STOCK EXCHANGE


	PREFERRED SHARE PURCHASE RIGHTS		NEW YORK STOCK EXCHANGE



Large Accelerated Filer xS	Accelerated Filer o£

Non-accelerated Filer o £~~(Do~~ (Do not check if a smaller reporting company)	Smaller Reporting Company o£



Part I.		Page
Item 1.	Business	1
Item 1A.	Risk Factors	10 11
Item 1B.	Unresolved Staff Comments	23
Item 2.	Properties	23
Item 3.	Legal Proceedings	24
Item 4.	(Removed and Reserved)	24
Part II.
Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Financial Data	27
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29 28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	48 44
Item 8.	Financial Statements and Supplementary Data	50 46
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	89 81
Item 9A.	Controls and Procedures	89 81
Item 9B.	Other Information	89 81
Part III.
Item 10.	Directors, Executive Officers and Corporate Governance	90 82
Item 11.	Executive Compensation	90 82
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	90 82
Item 13.	Certain Relationships and Related Transactions, and Director Independence	91 82
Item 14.	Principal Accounting Fees and Services	91 83
Part IV.
Item 15.	Exhibits and Financial Statement Schedules	92 84
Signatures		95 87
Exhibit Index		88



x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Fiscal Year Ended March 31,
		2006	1		2007	1,2		2008	1,2,3		2009	1,2,4,5		2010	1,2,4,6
	($ in thousands, except per share data)
STATEMENT OF OPERATIONS DATA:
Net revenues	$	629,725		$	676,514		$	747,935		$	674,590		$	613,837
Operating profit	$	99,851		$	84,677		$	115,166		$	61,461		$	97,635
Operating margin		15.9	%		12.5	%		15.4	%		9.1	%		15.9	%
Income from continuing operations	$	102,043		$	88,766		$	121,020		$	57,917		$	100,740
Income from continuing operations, net of tax	$	75,511		$	67,267		$	92,012		$	45,342		$	76,453
Basic earnings per share - continuing operations	$	1.60		$	1.42		$	1.91		$	0.93		$	1.58
Diluted earnings per share - continuing operations	$	1.55		$	1.40		$	1.87		$	0.93		$	1.55
Income (loss) on discontinued operations, net of tax	$	5,639		$	(17,124	)	$	(23,617	)	$	(110,241	)	$	(19,075	)
Cash dividends declared per common share	$	0.20		$	0.20		$	0.20		$	0.20		$	0.20
Shares used in basic per share calculations		47,120			47,361			48,232			48,589			48,504
Shares used in diluted per share calculations		48,788			48,020			49,090			48,947			49,331

BALANCE SHEET DATA:
Cash, cash equivalents, and short-term investments	$	76,732		$	103,365		$	163,091		$	218,180		$	369,192
Total assets	$	612,249		$	651,304		$	741,393		$	633,120		$	655,351
Long-term obligations	$	1,453		$	696		$	14,989		$	13,698		$	13,850
Total stockholders' equity	$	435,621		$	496,807		$	578,620		$	525,367		$	571,334

OTHER DATA:
Cash provided from operating activities	$	78,348		$	73,048		$	102,900		$	99,150		$	143,729


(in thousands)	Year Ended March 31,									Year Ended March 31,
	2008			2009			2010
										2010			2009
Net revenues	$	108,351		$	91,029		$	64,916		$	64,916		$	91,029
Cost of revenues		(103,318	)		(86,932	)		(53,127	)	(53,127		)	(86,932		)
Operating expenses		(37,232	)		(28,144	)		(16,433	)	(16,433		)	(28,144		)
Impairment of goodwill and long-lived assets		-			(117,464	)		(25,194	)	(25,194		)	(117,464		)
Restructuring and other related charges		(3,584	)		(1,122	)		(19	)	(19		)	(1,122		)
Loss on sale of AEG		-			-			(611	)	(611		)	—
Loss from operations of discontinued AEG segment (including loss on sale of AEG)		(35,783	)		(142,633	)		(30,468	)	(30,468		)	(142,633		)
Tax benefit from discontinued operations		(12,166	)		(32,392	)		(11,393	)	(11,393		)	(32,392		)
Loss on discontinued operations, net of tax	$	(23,617	)	$	(110,241	)	$	(19,075	)	$	(19,075	)	$	(110,241	)


	Payments Due by Period										Payments Due by Period
(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Operating leases	$	12,575	$	4,598	$	4,496	$	2,794	$	687	$	13,912	$	4,340	$	7,367	$	2,118	$	87
Unconditional purchase obligations		50,221		50,221		-		-		-	40,841		40,841		—		—		—
Total contractual cash obligations	$	62,796	$	54,819	$	4,496	$	2,794	$	687	$	54,753	$	45,181	$	7,367	$	2,118	$	87


(in thousands)	Year Ended March 31,									Years Ended March 31,
	2008			2009			2010
										2010			2009
Net revenues	$	108,351		$	91,029		$	64,916		$	64,916		$	91,029
Cost of revenues		(103,318	)		(86,932	)		(53,127	)	(53,127		)	(86,932		)
Operating expenses		(37,232	)		(28,144	)		(16,433	)	(16,433		)	(28,144		)
Impairment of goodwill and long-lived assets		-			(117,464	)		(25,194	)	(25,194		)	(117,464		)
Restructuring and other related charges		(3,584	)		(1,122	)		(19	)	(19		)	(1,122		)
Loss on sale of AEG		-			-			(611	)	(611		)	—
Loss from operations of discontinued AEG segment (including loss on sale of AEG)		(35,783	)		(142,633	)		(30,468	)	(30,468		)	(142,633		)
Tax benefit from discontinued operations		(12,166	)		(32,392	)		(11,393	)	(11,393		)	(32,392		)
Loss on discontinued operations, net of tax	$	(23,617	)	$	(110,241	)	$	(19,075	)	$	(19,075	)	$	(110,241	)

Fair value as of March 31, 2009
(in thousands)	Level 1		Level 2		Level 3		Total

Money market funds	$	61,604	$	-	$	-	$	61,604
U.S. Treasury Bills		109,981		-		-		109,981
Derivative assets		-		7,613		-		7,613
Auction rate securities - trading securities		-		-		23,718		23,718
Derivative - UBS Rights Agreement		-		-		4,180		4,180
Reserve Primary Fund		-		-		162		162
Total assets measured at fair value	$	171,585	$	7,613	$	28,060	$	207,258

Derivative liabilities	$	950	$	875	$	-	$	1,825



March 31, 2011 (in thousands)	Level 1		Level 2		Level 3		Total

Cash	$	136,804	$	—	$	—	$	136,804
U.S. Treasury Bills, Government Agency Securities and Money Market Accounts	192,703		43,543		—		236,246
Commercial Paper, U.S. Corporate Bonds and CDs	—		96,238		—		96,238
Derivative assets	—		360		—		360
Total assets measured at fair value	$	329,507	$	140,141	$	—	$	469,648

Derivative liabilities	$	600	$	4,174	$	—	$	4,774



March 31, 2010 (in thousands)	Level 1		Level 2		Level 3		Total

Cash	$	69,918	$	—	$	—	$	69,918
U.S. Treasury Bills and Money Market Accounts	280,043		—		—		280,043
Derivative assets	232		2,845		—		3,077
Auction rate securities - trading securities	—		—		19,231		19,231
Derivative - UBS Rights Agreement	—		—		3,985		3,985
Total assets measured at fair value	$	350,193	$	2,845	$	23,216	$	376,254

Derivative liabilities	$	29	$	74	$	—	$	103

Fair value as of March 31, 2010
(in thousands)	Level 1		Level 2		Level 3		Total

Money market funds	$	29,000	$	-	$	-	$	29,000
U.S. Treasury Bills		250,979		-		-		250,979
Derivative assets		232		2,845		-		3,077
Auction rate securities - trading securities		-		-		19,231		19,231
Derivative - UBS Rights Agreement		-		-		3,985		3,985
Reserve Primary Fund		-		-		-		-
Total assets measured at fair value	$	280,211	$	2,845	$	23,216	$	306,272

Derivative liabilities	$	29	$	74	$	-	$	103

(in thousands)	Continuing Operations1			Discontinued Operations2			Consolidated

Balance at March 31, 2008:
Goodwill	$	14,116		$	55,055		$	69,171
Accumulated impairment losses		-			-			-
		14,116			55,055			69,171
Carrying value adjustments		(111	)		(406	)		(517	)
Impairment to goodwill		-			(54,649	)		(54,649	)

Balance at March 31, 2009	$	14,005		$	-		$	14,005

As of March 31, 2009 (in thousands)	Gross Carrying Amount		Accumulated Amortization			Net Amount		Useful Life


As of March 31, 2011 (in thousands)									Gross Carrying Amount		Accumulated Amortization			Net Amount		Useful Life
Technology	$	9,460	$	(5,728	)	$	3,732	3-10 years	$	3,000	$	(2,812	)	$	188	3-8 years
Patents		1,420		(1,257	)		163	7 years
Customer relationships		4,405		(787	)		3,618	3-8 years	1,705		(1,044		)	661		3-8 years
Trade name - inMotion		500		(56	)		444	3 years
Trade name - Altec Lansing		18,600		-			18,600	Indefinite
OEM relationships		27		(9	)		18	7 years	27		(20		)	7		7 years
Total	$	34,412	$	(7,837	)	$	26,575		$	4,732	$	(3,876	)	$	856



As of March 31, 2010 (in thousands)	Gross Carrying Amount		Accumulated Amortization			Net Amount		Useful Life
Technology	$	6,500	$	(4,064	)	$	2,436	3-10 years
Patents	720		(660		)	60		7 years
Customer relationships	1,705		(765		)	940		3-8 years
OEM relationships	27		(14		)	13		7 years
Total	$	8,952	$	(5,503	)	$	3,449

(in thousands)	Severance and Benefits			Facilities and Equipment			Other			Total

Restructuring accrual at March 31, 2008	$	292		$	-		$	514		$	806

Restructuring and other related charges - continuing operations		10,269			581			102			10,952
Restructuring and other related charges - discontinued operations		1,077			(36	)		81			1,122
Cash payments		(6,170	)		107			(712	)		(6,775	)
Non-cash		-			(535	)		-			(535	)
Restructuring accrual at March 31, 2009		5,468			117			(15	)		5,570

Restructuring and other related charges - continuing operations		832			1,050			(15	)		1,867
Restructuring and other related charges - discontinued operations		19			-			-			19
Cash payments		(6,229	)		-			(67	)		(6,296	)
Non-cash		75			(1,167	)		97			(995	)
Restructuring accrual at March 31, 2010	$	165		$	-		$	-		$	165

	Options Outstanding
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(in thousands)					(in years)		(in thousands)		Options Outstanding
Outstanding at March 31, 2009		8,893		$	25.25
										Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
										(in thousands)				(in years)	(in thousands)
Outstanding at March 31, 2010										7,631		$	25.06
Options granted		1,348		$	20.65					542		$	32.86
Options exercised		(1,493	)	$	21.81			$	9,025	(2,196	)	$	22.81
Options forfeited or expired		(1,117	)	$	25.55					(617	)	$	35.43
Outstanding at March 31, 2010		7,631		$	25.06		3.4	$	57,778
Exercisable at March 31, 2010		5,557		$	26.87		2.6	$	-
Outstanding at March 31, 2011										5,360		$	25.58	3.1	$	62,072
Vested or expected to vest at March 31, 2011										5,265		$	25.53	3.1	$	61,259
Exercisable at March 31, 2011										4,124		$	25.55	2.3	$	48,557

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)
Non-vested at March 31, 2009		363		$	20.39
						Number of Shares		Weighted Average Grant Date Fair Value
						(in thousands)
Non-vested at March 31, 2010						361		$	21.41
Granted		154		$	24.62	491		$	33.54
Vested		(137	)	$	22.36	(137	)	$	22.14
Forfeited		(19	)	$	20.98	(27	)	$	27.72
Non-vested at March 31, 2010		361		$	21.41
Non-vested at March 31, 2011						688		$	29.52


	Employee Stock Options									Employee Stock Purchase Plan									Employee Stock Options									ESPP
Fiscal Year Ended March 31,	2008			2009			2010			2008			2009			2010			2011			2010			2009			2011			2010			2009
Expected volatility		39.6	%		51.6	%		53.7	%		45.3	%		63.0	%		49.0	%	45.7		%	53.7		%	51.6		%	38.7		%	49.0		%	63.0		%
Risk-free interest rate		4.0	%		2.9	%		2.0	%		3.4	%		0.9	%		0.2	%	1.4		%	2.0		%	2.9		%	0.2		%	0.2		%	0.9		%
Expected dividends		0.8	%		1.2	%		1.0	%		0.9	%		1.6	%		0.8	%	0.6		%	1.0		%	1.2		%	0.6		%	0.8		%	1.6		%
Expected life (in years)		4.2			4.4			4.5			0.5			0.5			0.5		4.2			4.5			4.4			0.5			0.5			0.5
Weighted-average grant date fair value	$	9.35		$	7.65		$	8.71		$	6.20		$	4.56		$	7.22		$	11.92		$	8.71		$	7.65		$	8.67		$	7.22		$	4.56



	Local Currency	USD Equivalent		Position	Maturity
	(in thousands)	(in thousands)
EUR	18,000	$	25,540	Sell EUR	1 month
GBP	4,000	$	6,443	Sell GBP	1 month
AUD	3,400	$	3,515	Sell AUD	1 month


		Derivative Assets Reported in Other Current Assets					Derivative Liabilities Reported in Other Current Accrued Liabilities				Derivative Assets Reported in Other Current Assets				Derivative Liabilities Reported in Accrued Liabilities
(in thousands)	Balance Sheet Line Item	March 31, 2009		March 31, 2010		Balance Sheet Line Item	March 31, 2009		March 31, 2010		March 31, 2011		March 31, 2010		March 31, 2011		March 31, 2010

Foreign exchange contracts designated as cash flow hedges	Other current assets	$	7,613	$	2,845	Accrued liabilities	$	875	$	74	$	360	$	2,845	$	4,174	$	74
Total derivatives designated as hedging instruments			7,613		2,845			875		74	360		2,845		4,174		74

Foreign exchange contracts not designated	Other current assets		-		-	Accrued liabilities		2		-	—		—		—		—
Total derivatives		$	7,613	$	2,845		$	877	$	74	$	360	$	2,845	$	4,174	$	74


(in thousands)	March 31, 2008			Amount of gain (loss) recognized in OCI (effective portion)		Amount of gain (loss) reclassified from OCI to income (loss) (effective portion)		March 31, 2009		March 31, 2010		Amount of gain (loss) recognized in OCI (effective portion)			Amount of gain (loss) reclassified from OCI to income (loss) (effective portion)			March 31, 2011

Foreign exchange contracts designated as cash flow hedges	$	(6,217	)	$	17,460	$	4,505	$	6,738	$	2,771	$	(3,668	)	$	2,917	—	$	(3,814	)

	Quarter Ended
	June 30, 20081,2			September 30, 20081			December 31, 20083,4,7,8			March 31, 20094,5
	($ in thousands, except per share data)

Net revenues	$	198,527		$	195,349		$	152,616		$	128,098
Gross profit	$	89,170		$	92,746		$	60,417		$	49,598
Income (loss) from continuing operations, net of tax	$	24,937		$	21,753		$	6,154		$	(7,502	)
Loss from discontinued operations, net of tax10	$	(4,443	)	$	(4,105	)	$	(98,163	)	$	(3,530	)
Net income (loss)11	$	20,494		$	17,648		$	(92,009	)	$	(11,032	)
Basic net income (loss) per common share12	$	0.42		$	0.36		$	(1.90	)	$	(0.23	)
Diluted net income (loss) per common share12	$	0.42		$	0.36		$	(1.90	)	$	(0.23	)
Cash dividends declared per common share	$	0.05		$	0.05		$	0.05		$	0.05

	Quarter Ended
	June 30, 20095,6			September 30, 20095,7			December 31, 20095		March 31, 20105,9
	($ in thousands, except per share data)

Net revenues	$	141,162		$	144,458		$	165,935	$	162,282
Gross profit	$	65,004		$	67,931		$	80,369	$	87,766
Income from continuing operations, net of tax	$	12,938		$	15,897		$	23,203	$	24,415
Income (loss) from discontinued operations, net of tax10	$	(2,288	)	$	(16,643	)	$	47	$	(191	)
Net income (loss)11	$	10,650		$	(746	)	$	23,250	$	24,224
Basic net income (loss) per common share12	$	0.22		$	(0.02	)	$	0.48	$	0.50
Diluted net income (loss) per common share12	$	0.22		$	(0.02	)	$	0.47	$	0.49
Cash dividends declared per common share	$	0.05		$	0.05		$	0.05	$	0.05



	Quarter Ended
	March31, 2011¹		December 31, 2010²		September 30, 2010		June 30, 2010
	(in thousands, except per share data)
Net revenues	$	173,077	$	181,585	$	158,255	$	170,685
Gross profit	$	90,541	$	95,808	$	85,959	$	89,448
Net income	$	26,316	$	31,552	$	25,429	$	25,946
Basic net income per common share⁸	$	0.55	$	0.66	$	0.54	$	0.54
Diluted net income per common share⁸	$	0.53	$	0.64	$	0.52	$	0.52
Cash dividends declared per common share	$	0.05	$	0.05	$	0.05	$	0.05



	Quarter Ended
	March31, 2010^2,3			December 31, 2009²		September 30, 2009^2,4			June 30, 2009^2,5
	(in thousands, except per share data)
Net revenues	$	162,282		$	165,935	$	144,458		$	141,162
Gross profit	$	87,766		$	80,369	$	67,931		$	65,004
Income from continuing operations, net of tax	$	24,415		$	23,203	$	15,897		$	12,938
Income (loss) from discontinued operations, net of tax⁶	$	(191	)	$	47	$	(16,643	)	$	(2,288	)
Net income (loss)⁷	$	24,224		$	23,250	$	(746	)	$	10,650
Basic net income (loss) per common share⁸	$	0.50		$	0.48	$	(0.02	)	$	0.22
Diluted net income (loss) per common share⁸	$	0.49		$	0.47	$	(0.02	)	$	0.22
Cash dividends declared per common share	$	0.05		$	0.05	$	0.05		$	0.05