Table of the holiday shopping season. Additionally, other factors directly impact our Consumer product category performance, such as product life-cycles (including the introduction and pace of adoption of new technology), the market acceptance of new product introductions, consumer preferences and the competitive retail environment, changes in consumer confidence and other macroeconomic factors, and fluctuations in foreign currency rates relative to the U.S. Dollar ("USD"). In addition, the timing or non-recurrence of retailer placements can cause volatility in quarter-to-quarter results.Contents

When compared to the same prior year period, the decline in Consumer revenues in the third quarter of Fiscal Year 2018 was primarily attributable to a decline in sales of our stereo Bluetooth products where new product introductions have not yet fully integrated into the market to replace revenues from certain older stereo products. Consumer product refreshes and launches typically take multiple quarters to fully integrate into the market, and it is difficult to predict at what point, if ever, these products will materially contribute to results or replace the sales of preceding models. We are currently refreshing our Consumer portfolio, having recently launched the BackBeat 300 and 500, refreshed BackBeat FIT Training and Boost editions, and RIG 800 series. Additionally, the divestiture of our Clarity line of business negatively impacted our Consumer results when compared to the same prior year period.

We continue to invest in new ideas and technology to create additional growth opportunities, such as Plantronics Manager Pro, our software-as-a-service ("SaaS") data insights offering introduced in Fiscal Year 2017, and Habitat Soundscaping, our intelligent acoustic management solution launched in July 2017. While we anticipate these investments will benefit our growth in the long term, their contribution will not be material in the near term.

We remain cautious about the macroeconomic environment, based primarily on uncertainty around trade and fiscal policy in the U.S. and broader economic uncertainty in many parts of Europe and Asia Pacific. We will continue to monitor our expenditures and prioritize those that further our strategic long-term growth opportunities, such as innovative product development. UC and SaaS are the central focus of our sales force, marketing group, and other customer service and support teams as we continue investing in key strategic alliances and integrations with major UC vendors, and work to expand the market opportunity for our SaaS offering.

RESULTS OF OPERATIONS

We group our operations into two reportable segments: Products and Services. Our Products segment consists of Headsets, Voice, and Video product categories and our Services segment consists of support, professional, managed, and cloud services and solutions.

NET REVENUES

The following ~~graphs display~~table sets forth net revenues by ~~product category~~reportable segment for the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017:~~December 28, 2019:

~~Net Revenues(in millions)~~ ~~Revenue by Product Category~~ ~~(percent)~~


	Three Months Ended								Nine Months Ended
(in thousands, except percentages)	December 26, 2020		December 28, 2019		Change				December 26, 2020		December 28, 2019		Change
Net revenues
Products	$	420,711	$	316,633	$	104,078	32.9	%	$	1,059,846	$	1,094,515	$	(34,669)	(3.2)	%
Services	63,974		67,838		(3,864)		(5.7)	%	191,529		199,432		(7,903)		(4.0)	%
Total net revenues	$	484,685	$	384,471	$	100,214	26.1	%	$	1,251,375	$	1,293,947	$	(42,572)	(3.3)	%

Products

Net products revenues increased in the three months ended December 26, 2020 compared to the prior year period, primarily due to the following:

•Enterprise Headset and Video net revenues were driven by the COVID-19 shift toward "work from anywhere" and the need for office workers to be able to effectively communicate and collaborate regardless of location. Although we continue to experience periodic supply constraints on certain headsets and new video products, we were able to more than double unit shipments in each category year over year. Video demand was also driven by remote learning, telemedicine, and the continued ramp of our new video portfolio.

•Partially offsetting these increases were declines in our Voice product revenues as a result of the COVID-19 shift in demand toward "work from home" products, as well as declines in the our Consumer Headsets portfolio primarily due to our decision to discontinue certain low-margin mono and stereo products and the sale of our gaming headset assets in the fiscal fourth quarter of FY20.

Net products revenues decreased in the nine months ended December 26, 2020 compared to the prior year period, primarily due to the following:

•Voice product revenues declined as a result of the COVID-19 shift in demand toward "work from anywhere" products.

•Consumer Headsets declined significantly year over year primarily due to our decision to discontinue certain low-margin mono and stereo products and the sale of our gaming headset assets in the fiscal fourth quarter of FY20.

•Partially offsetting the declines in Voice and Consumer, we saw growth in Enterprise Headset and Video net revenues driven by the COVID-19 shift toward "work from home" and the need for office workers to be able to effectively communicate and collaborate regardless of location. Although we continue to experience periodic supply constraints on certain headsets and new video products, we were able to ship a record number of headsets and video units during the period. Video demand was also driven by remote learning, telemedicine, and the continued ramp of our new video portfolio.

Services

Net services revenues decreased slightly in the three and nine months ended December ~~31, 2017 compared~~26, 2020 due to the ~~prior year periods due primarily~~Video product mix shift from legacy Platform and Telepresence to ~~lower revenues within our Consumer product category,~~recently launched Studio video bars, which are less complex, easier to install and operate, and carry optional service contracts. The decrease was partially offset by ~~increases in our Enterprise product revenues driven by UC revenues.~~the impact of the deferred revenue fair value adjustment resulting from the Polycom Acquisition (the "Acquisition").

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~~Geographic Information~~ ~~(in millions)~~ ~~Revenue by Region~~ ~~(percent)~~

~~Compared to the prior year periods, U.S.~~The following table sets forth net revenues ~~decreased in the three and nine months ended December 31, 2017due primarily to a decline in Consumer product sales volumes, driven~~ by a decline in sales of our stereo Bluetooth products and the divestiture of our Clarity business. These declines were partially offset by increases in Enterprise, resulting from continued growth in UC within both the Voyager and Blackwire product families.

~~International net revenues~~geographic region for the three and nine months ended December ~~31, 2017 increased from~~26, 2020 and December 28, 2019:


	Three Months Ended								Nine Months Ended
(in thousands, except percentages)	December 26, 2020		December 28, 2019		Change				December 26, 2020		December 28, 2019		Change
Net revenues
U.S.	$	193,413	$	175,856	$	17,557	10.0	%	$	545,472	$	613,810	$	(68,338)	(11.1)	%

Europe and Africa	181,429		105,931		75,498		71.3	%	405,933		351,883		54,050		15.4	%
Asia Pacific	76,823		73,630		3,193		4.3	%	212,657		235,931		(23,274)		(9.9)	%
Americas, excluding U.S.	33,020		29,054		3,966		13.7	%	87,313		92,323		(5,010)		(5.4)	%
Total international net revenues	291,272		208,615		82,657		39.6	%	705,903		680,137		25,766		3.8	%
Total net revenues	$	484,685	$	384,471	$	100,214	26.1	%	$	1,251,375	$	1,293,947	$	(42,572)	(3.3)	%

United States (U.S.)

Compared to the same prior year ~~ago periods due to growth in our Enterprise category, driven primarily by UC product sales. Changes in foreign exchange rates increased~~period, U.S. net revenues ~~by $4.1 million, net of the effects of hedging,~~ for the three months ended December ~~31, 2017, compared~~26, 2020 increased primarily due to ~~an immaterial impact~~increased net sales in our Enterprise Headset and Video revenues partially offset by decreases in Consumer Headset and Voice revenues.

Compared to the same prior year ~~period. During~~period, U.S. net revenues for the nine months ended December ~~31, 2017,~~26, 2020 decreased primarily due to declines in our Voice product revenues, which was a result of COVID-19 shift in demand toward "work from home" products. Our Consumer Headset product revenues declined driven by our decision to eliminate lower margin consumer products from our portfolio, including the Fiscal Year 2020 sale of gaming headset assets. These declines were partially offset by growth in our Video product revenues as new products ramp and an increase in sales of our Enterprise Headset products.

International

International net revenues, notably in Europe and Africa, for the three and nine months ended December 26, 2020 increased from the same prior year period primarily due to an increase in our Enterprise Headset and Video product revenues due to a shift to "work from anywhere", telemedicine, and remote learning. These increases were partially offset by a decline in Consumer Headset and Voice product revenues.

During the three months ended December 26, 2020, changes in foreign ~~exchange~~exchange rates ~~positively~~favorably impacted net revenues by ~~$1.3~~$8.4 million, net of the effects of hedging, compared to ~~an immaterial amount~~a $3.6 million unfavorable impact on revenue in the prior year period.

During the nine months ended December 26, 2020, changes in foreign exchange rates favorably impacted net revenues by $5.8 million, net of the effects of hedging, compared to a $11.2 million unfavorable impact on revenue in the prior year period.

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COST OF REVENUES AND GROSS PROFIT

Cost of revenues consists primarily of direct and contract manufacturing costs, ~~warranty,~~amortization of acquired technology, freight, ~~depreciation, duties,~~warranty, charges for excess and obsolete inventory, depreciation, duties, royalties, and overhead expenses.


	Three Months Ended										Nine Months Ended
(in thousands, except percentages)	December 26, 2020			December 28, 2019			Change				December 26, 2020			December 28, 2019			Change
Products:
Net revenues	$	420,711		$	316,633		$	104,078	32.9	%	$	1,059,846		$	1,094,515		$	(34,669)	(3.2)	%
Cost of revenues	236,842			220,469			16,373		7.4	%	622,718			658,408			(35,690)		(5.4)	%
Gross profit	$	183,869		$	96,164		$	87,705	91.2	%	$	437,128		$	436,107		$	1,021	0.2	%
Gross profit %	43.7		%	30.4		%					41.2		%	39.8		%
Services:
Net revenues	$	63,974		$	67,838		$	(3,864)	(5.7)	%	$	191,529		$	199,432		$	(7,903)	(4.0)	%
Cost of revenues	21,186			20,156			1,030		5.1	%	64,921			72,976			(8,055)		(11.0)	%
Gross profit	$	42,788		$	47,682		$	(4,894)	(10.3)	%	$	126,608		$	126,456		$	152	0.1	%
Gross profit %	66.9		%	70.3		%					66.1		%	63.4		%
Total:
Net revenues	$	484,685		$	384,471		$	100,214	26.1	%	$	1,251,375		$	1,293,947		$	(42,572)	(3.3)	%
Cost of revenues	258,028			240,625			17,403		7.2	%	687,639			731,384			(43,745)		(6.0)	%
Gross profit	$	226,657		$	143,846		$	82,811	57.6	%	$	563,736		$	562,563		$	1,173	0.2	%
Gross profit %	46.8		%	37.4		%					45.0		%	43.5		%

Three Months Ended Nine Months Ended
December 31, Increase December 31, Increase
(in thousands, except percentages) 2016 2017 (Decrease) 2016 2017 (Decrease)
Net revenues $ 232,933
$ 226,534
$ (6,399 ) (2.7 )% $ 672,222
$ 640,760
$ (31,462 ) (4.7 )%
Cost of revenues 122,753
112,409
(10,344 ) (8.4 )% 338,523
315,720
(22,803 ) (6.7 )%
Gross profit $ 110,180
$ 114,125
$ 3,945
3.6 % $ 333,699
$ 325,040
$ (8,659 ) (2.6 )%
Gross profit % 47.3 % 50.4 %

49.6 % 50.7 %

Products

Compared to the ~~same~~ prior year ~~periods,~~period, gross profit as a percentage of net revenues increased in the three and nine months ended December ~~31, 2017,~~26, 2020, primarily due ~~primarily~~to a decrease in intangible asset amortization expense resulting from the long-lived asset impairment of existing technology related to our Voice products in the fourth quarter of Fiscal Year 2020, the non-recurrence of inventory-related reserves taken during the third quarter of Fiscal Year 2020 in connection with the optimization of our Consumer product ~~cost reductions~~portfolio, and a favorable product mix. ~~Gross profit for~~Partially offsetting these favorable items was COVID-19 related incremental manufacturing and logistics costs and Video product transitions.

Given the nine months ended December 31, 2017 was also negatively impacted by the loss recorded on the sale of our Clarity division and the write-off of an indirect tax asset in our Brazilian entity, both of which are discussed in detail in Note 8, ~~Restructuring and other related charges (credits), in the accompanying footnotes to the condensed consolidated financial statements.~~

~~There are~~ significant variances in gross profit percentages between our higher and lower margin ~~products; therefore, small~~products, gross profit percentages may be impacted by variations in product mix ~~which can be difficult~~and other factors, including production levels, pricing and promotions, distribution channels, and return rates.

Services

Compared to ~~predict, can have a significant impact on~~the prior year period, the gross profit as a percentage of net ~~revenues. Gross~~revenues decreased in the three months ended December 26, 2020, primarily due to fixed cost items spread over lower net revenues partially offset by the decrease in the Acquisition-related deferred revenue fair value adjustment.

Compared to the prior year period, the gross profit ~~percentages may also vary based on distribution channel, return rates,~~as a percentage of net revenues increased in the nine months ended December 26, 2020, primarily due to the decrease in the Acquisition-related deferred revenue fair value adjustment and ~~other factors.~~a lower fixed cost base.

~~RESEARCH, DEVELOPMENT, AND ENGINEERING~~

Research, development, and engineering costs are expensed as incurred and consist primarily of compensation costs, outside services, including legal fees associated with protecting our intellectual property, expensed materials, travel expenses, depreciation, and overhead expenses.

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Three Months Ended Nine Months Ended
December 31, Increase December 31, Increase
(in thousands, except percentages) 2016 2017 (Decrease) 2016 2017 (Decrease)
Research, development, and engineering $ 21,393
$ 21,257
$ (136 ) (0.6 )% $ 66,116
$ 62,402
$ (3,714 ) (5.6 )%
% of net revenues 9.2 % 9.4 %
9.8 % 9.7 %
OPERATING EXPENSES

~~During~~Operating expenses for the three and nine months ended December ~~31, 2017, research,~~26, 2020 and December 28, 2019 were as follows:


	Three Months Ended										Nine Months Ended
(in thousands, except percentages)	December 26, 2020			December 28, 2019			Change				December 26, 2020			December 28, 2019			Change
Research, development, and engineering	$	54,150		$	53,769		$	381	0.7	%	$	156,327		$	170,708		$	(14,381)	(8.4)	%
Selling, general and administrative	129,641			144,978			(15,337)		(10.6)	%	361,892			457,004			(95,112)		(20.8)	%
(Gain) loss, net from litigation settlements	—			—			—		—	%	17,561			(1,162)			18,723		1,611.3	%
Restructuring and other related charges	13,977			21,724			(7,747)		(35.7)	%	49,477			47,096			2,381		5.1	%
Total Operating Expenses	$	197,768		$	220,471		$	(22,703)	(10.3)	%	$	585,257		$	673,646		$	(88,389)	(13.1)	%
% of net revenues	40.8		%	57.3		%					46.8		%	52.1		%

Research, development, and engineering expenses ~~declined~~ decreased during the nine months ended December 26, 2020 when compared to the prior year ~~periods~~period primarily due ~~primarily to~~to lower compensation expense driven by reduction in headcount, cost control efforts, and decreased expenses ~~driven primarily by reduced funding of our variable compensation plans and cost reductions from our restructuring actions initiated in prior periods.~~due to COVID-19 restrictions.

~~SELLING, GENERAL, AND ADMINISTRATIVE~~

Selling, general and administrative expenses ~~consist primarily of compensation costs, marketing costs, travel expenses, litigation and professional service fees, and overhead expenses.~~

Three Months Ended Nine Months Ended
December 31, Increase December 31, Increase
(in thousands, except percentages) 2016 2017 (Decrease) 2016 2017 (Decrease)
Selling, general, and administrative $ 56,919
$ 56,196
$ (723 ) (1.3 )% $ 169,581
$ 170,125
$ 544
0.3 %
% of net revenues 24.4 %
24.8 %

25.2 %
26.6 %

Compared to the same year ago periods, selling, general, and administrative expenses were flat in the three and nine months ended December 31, 2017, with increases in legal fees related to our litigation with GN Netcom being offset by lower compensation expenses, driven primarily by reduced funding of our variable compensation plans, lower executive transition costs, cost savings from cost control initiatives and prior period restructuring actions. The litigation with GN Netcom was resolved in October 2017 in favor of the Company on all counts, as discussed further in Note 6, ~~Commitments and Contingencies~~, in the accompanying footnotes to the condensed consolidated financial statements. As such, we expect legal fees to decrease in future quarters given there are currently no material outstanding legal matters.

~~(GAIN) LOSS, NET FROM LITIGATION SETTLEMENTS~~

Three Months Ended Nine Months Ended
December 31, Increase December 31, Increase
(in thousands, except percentages) 2016 2017 (Decrease) 2016 2017 (Decrease)
(Gain) loss, net from litigation settlements $ (103 ) $ (15 ) $ 88
(85.4 )% $ 4,287
$ (295 ) $ (4,582 ) (106.9 )%
% of net revenues — % — % 0.6 % — %

~~We recognized immaterial gains from litigation in~~ decreased during the three months ended December ~~31, 2016 and 2017. In the nine months ended December 31, 2017, we recognized immaterial gains~~26, 2020 when compared to the prior year period primarily due to lower compensation expense driven by reduced headcount, cost control efforts, and decreased travel expenses due to COVID-19 restrictions. The decreases were partially offset by higher incentive compensation when ~~we recognized a $4.9 million charge related~~compared to ~~discovery sanctions in~~ the ~~GN Netcom litigation.~~

~~RESTRUCTURING AND OTHER RELATED CHARGES (CREDITS)~~

Three Months Ended Nine Months Ended
December 31, Increase December 31, Increase
(in thousands, except percentages) 2016 2017 (Decrease) 2016 2017 (Decrease)
Restructuring and other related charges (credits) $ 113
$ (84 ) $ (197 ) (174.3 )% $ (1,350 ) $ 2,438
$ 3,788
(280.6 )%
% of net revenues — % — % (0.2 )% 0.4 %

Inprior year period. Selling, general and administrative expenses decreased during the ~~three~~nine months ended December ~~31, 2016 and 2017, we recognized immaterial adjustments resulting from changes~~26, 2020 when compared to the ~~estimates~~prior year period primarily due to integration related expenses that did not occur in the current period, lower compensation expense, driven by reduced headcount and lower sales commissions, decreased expenses due to ~~restructuring actions~~COVID-19 restrictions, and other cost control efforts. The decreases were partially offset by higher incentive compensation when compared to the prior year period.

During the nine months ended December 26, 2020 we recorded ~~in prior periods.~~litigation charges for settlements that occurred during the period. See Note 7, Commitments and Contingencies, of the accompanying notes to condensed consolidated financial statements for further information regarding on-going litigation.

Compared to the prior year period, restructuring and other related charges ~~(credits) increased~~decreased in the ~~nine~~three months ended December ~~31, 2017,~~26, 2020 primarily related to severance due to headcount related actions initiated in the prior year period. Compared to the prior year period, restructuring and other related charges increased in the nine months ended December 26, 2020, primarily due to new restructuring actions initiated during the ~~first quarter~~period to reduce expenses and optimize our cost structure and align with projected revenue levels. These actions consisted of ~~Fiscal Year 2018. In the prior year period we recorded a net reduction to expenses resulting from changes to the estimates related to our restructuring actions recorded in Fiscal Year 2016.~~

headcount reductions and office closures. For more information regarding restructuring activities, ~~refer to~~see Note 8, 9, Restructuring and ~~other related charges (credits)~~Other Related Charges, of the accompanying notes to condensed consolidated financial statements.

INTEREST EXPENSE

Interest expense for the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019 was ~~$7.3 million and $21.9 million, respectively and relates primarily to our 5.50% Senior Notes.~~as follows:


	Three Months Ended										Nine Months Ended
(in thousands, except percentages)	December 26, 2020			December 28, 2019			Change				December 26, 2020			December 28, 2019			Change
Interest expense	$	(18,417)		$	(22,533)		$	4,116	18.3	%	$	(58,182)		$	(70,262)		$	12,080	17.2	%
% of net revenues	(3.8)		%	(5.9)		%					(4.6)		%	(5.4)		%

~~OTHER NON-OPERATING INCOME AND (EXPENSE), NET~~

Three Months Ended Nine Months Ended
December 31, Increase December 31, Increase
(in thousands, except percentages) 2016 2017 (Decrease) 2016 2017 (Decrease)
Other non-operating income and (expense), net

$ 427
$ 2,490
$ 2,063
483.1 % $ 4,119
$ 5,230
$ 1,111
27.0 %
% of net revenues 0.2 % 1.1 % 0.6 % 0.8 %

Other non-operating income and (expense), net for the three months ended December 31, 2017 increased primarily due to favorable changes in the Mexican Peso exchange rate and an increase in interest income from higher average yields on our investment portfolio.

Other non-operating income and (expense), net for the nine months ended December 31, 2017 increased primarily due to increases in interest income from higher average yields on our investment portfolio.

~~INCOME TAX EXPENSE~~

Three Months Ended Nine Months Ended
December 31, Increase December 31, Increase
(in thousands except percentages) 2016
2017 (Decrease) 2016
2017 (Decrease)
Income before income taxes $ 24,963
$ 31,920
$ 6,957
27.9 % $ 77,317
$ 73,696
$ (3,621 ) (4.7 )%
Income tax expense 2,742
81,424
78,682
2,869.5 % 14,235
84,419
70,184
493.0 %
Net income $ 22,221
$ (49,504 ) $ (71,725 ) (322.8 )% $ 63,082
$ (10,723 ) $ (73,805 ) (117.0 )%
Effective tax rate 11.0 % 255.1 %

18.4 % 114.6 %

On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1) (the “Act”) was signed into law in the United States. The Act includes several changes to existing tax law, including, among other things, a permanent reduction in the corporate income tax rate from 35% to 21% and the move from a worldwide to a territorial tax system.

The move to a territorial tax system was accompanied by federal taxation of a one-time deemed repatriation of accumulated unremitted earnings (hereafter, the "toll charge"), which we will elect to pay over an eight-year period as permitted under the Act. We recorded a $69.3 million toll charge as part of income taxInterest expense in the quarter ended December 31, 2017, representing a provisional estimate that will be finalized when we complete our review of data spanning a 30-year period. The provisional toll charge increased our effective tax rate by 217.2% and 94.1% decreased for the three and nine months ended December ~~31, 2017, respectively.~~

~~As part~~26, 2020 primarily due to a lower outstanding balance on the term loan facility, the gains recognized on the repurchase of outstanding debt, and lower interest rates. See Note 8, Debt, of the ~~Act, we also completed our remeasurement~~accompanying notes to condensed consolidated financial statements.

Table of deferred tax assets as of December 31, 2017 to the new future federal tax rate of 21.0%, thereby reducing our deferred tax assets by $2.1 million. The rate change resulted in an overall increase to our effective tax rate by 6.6% and 2.9%Contents

OTHER NON-OPERATING INCOME, NET

Other non-operating income, net for the three and nine months ended December 31, 2017, respectively. In addition, prior to our third quarter of Fiscal Year 2018, we did not recognize a deferred tax liability related to unremitted foreign earnings because our plans did not require us to repatriate earnings from foreign operations to fund U.S. operations. We expect to fund payment of the toll charge by repatriating a portion of our foreign earnings26, 2020 and December 28, 2019 was as ~~such, have recorded a deferred tax liability of $5.0 million related to state~~follows:


	Three Months Ended										Nine Months Ended
(in thousands, except percentages)	December 26, 2020			December 28, 2019			Change				December 26, 2020			December 28, 2019			Change
Other non-operating income, net	$	2,596		$	967		$	1,629	168.5	%	$	4,188		$	675		$	3,513	520.4	%
% of net revenues	0.5		%	0.3		%					0.3		%	0.1		%

Other non-operating income, ~~taxes and foreign withholding taxes that will become due as we repatriate our foreign earnings. This increased our effective tax rate by 15.6% and 6.8%~~net for the three and nine months ended December ~~31, 2017, respectively. Finally,~~26, 2020 increased primarily due to immaterial net foreign currency gains and immaterial unrealized gains on the deferred compensation portfolio during the current period compared to immaterial unrealized gains on the deferred compensation portfolio and immaterial net foreign currency gains in the prior period.

INCOME TAX BENEFIT


	Three Months Ended										Nine Months Ended
(in thousands except percentages)	December 26, 2020			December 28, 2019			Change				December 26, 2020			December 28, 2019			Change
Income (loss) before income taxes	$	13,068		$	(98,191)		$	111,259	113.3	%	$	(75,515)		$	(180,670)		$	105,155	58.2	%
Income tax benefit	(7,045)			(19,708)			12,663		64.3	%	(7,208)			(31,406)			24,198		77.0	%
Net income (loss)	$	20,113		$	(78,483)		$	98,596	125.6	%	$	(68,307)		$	(149,264)		$	80,957	54.2	%
Effective tax rate	(53.9)		%	20.1		%					9.6		%	17.4		%

The Company and its subsidiaries are subject to taxation in the U.S. and in various foreign and state jurisdictions. Our income tax expense or benefit is determined using an estimate of our ~~fiscal year-end we~~annual effective tax rate and adjusted for discrete items that are ~~required to pro-rate~~taken into account in the ~~new and old~~relevant period. The effective tax rates ~~during Fiscal Year 2018. The blended, annualized tax rate applied to Fiscal Year 2018 income is 31.56%. This reduction in the federal tax rate reduced our global tax rate by 2.3% and 1.0%~~ for the three months ended December 26, 2020 and December 28, 2019 were (53.9)% and 20.1%, respectively. The effective tax rates for the nine months ended December ~~31, 2017,~~26, 2020 and December 28, 2019 were 9.6% and 17.4%, respectively.

The provisional estimate for the toll charge will be finalized when we complete our substantive review of unremitted foreign earnings through examination of statutory filings and tax returns of our foreign subsidiaries and fiscal branches that span a 30-year period. We must also analyze the impact of foreign exchange rates and inflation on the historical information to support foreign tax credits available to offset the toll charge. In addition, our estimate of the toll charge obligation may change ~~due to legislative technical corrections, the IRS' promulgation of regulations to interpret the Act, and changes~~ in accounting standards for income taxes or related interpretations in response to the Act. This review and finalization of the toll charge provisional estimate will be completed within a twelve month measurement period from the date of enactment.

We adopted the new stock-based compensation accounting guidance effective the beginning of Fiscal Year 2018. Excess tax benefits associated with employee equity plans were previously recorded in additional paid-in capital and the adoption of this guidance had an immaterial impact on our effective tax rate for the three ~~months ended December 31, 2017, but resulted in a reduction to our effective tax rate by 2.6 percentage points for the~~and nine months ended December 31, 2017. The amount of excess tax benefits or deficiencies will fluctuate from period-to-period based on the price of our stock, the volume of share-based instruments settled or vested, and the value assigned to employee equity awards under U.S. GAAP.

~~We recorded a correction~~26, 2020 relative to the ~~geographic mix~~prior year is primarily due to recently enacted statutory tax rate increase in Netherlands, resulting in a benefit from a revaluation of net deferred tax assets from internal intangible property restructuring between our wholly-owned subsidiaries.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income ~~during~~will be generated to permit use of the ~~nine months~~existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the two-year period ended ~~December 31, 2017 related to~~March 28, 2020 and Fiscal Year ~~2017, which reduced income~~2021 forecasted results in the U.S. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of December 26, 2020, a ~~high~~valuation allowance against U.S. federal and state deferred tax ~~jurisdiction and increased income in a low tax jurisdiction. This correcting adjustment had no impact on~~assets continues to be maintained for the three months ended December ~~31, 2017, but resulted~~26, 2020.

As of December 26, 2020, we had approximately $97.3 million in ~~a reduction~~non-US net deferred tax assets ("DTAs") after valuation allowance. A significant portion of our DTAs relate to ~~our effective tax rate by 3.5 percentage points for the nine months ended December 31, 2017 as compared to the prior year period. For additional details regarding~~internal intangible property restructuring between wholly-owned subsidiaries. At this ~~correction refer to Note 1,~~ ~~Basis of Presentation~~,time, based on evidence currently available, we consider it more likely than not that we will have sufficient taxable income in the ~~accompanying footnotes~~future that will allow us to realize our DTAs; however, failure to generate sufficient future taxable income could result in some or all DTAs not being utilized in the ~~condensed consolidated financial statements.~~future. If we are unable to generate sufficient future taxable income, a substantial valuation allowance to reduce our DTAs may be required.

We are subject to taxation in various foreign and state jurisdictions, including the U.S. Our Fiscal Year 2016 federal income tax return is currently under examination by the Internal Revenue Service. Foreign income tax matters for material tax jurisdictions have been concluded for tax years prior to Fiscal Year 2012.

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FINANCIAL CONDITION



~~Operating Cash Flow~~ ~~(in millions)~~	~~Investing Cash Flow(in millions)~~	~~Financing Cash Flow~~ ~~(in millions)~~

Our primary source of liquidity is cash provided by operating activities and, on occasion, financing obtained from capital markets and other financing sources, such as our revolving credit line. We believe that internally generated cash flows are generally sufficient to support our business operations, capital expenditures, restructuring activities, principal and interest payment of debt, income tax payments and the payment of stockholder dividends, in addition to investments and share repurchases. We expect that cash provided by operating activities will fluctuate in future periods as a result of a number of factors, including fluctuations in our revenues and operating income, the timing of product shipments during the quarter, accounts receivable collections, inventory and supply chain management, and the timing and amount of tax, interest, annual bonus, and other payments.

~~Operating Activities~~

Compared to the same year ago period, net cash provided by operating activities during the nine months ended December 31, 2017 decreased primarily as a result of higher payouts in the first quarter of Fiscal Year 2018 related to Fiscal Year 2017 variable compensation than payouts during the prior year period for Fiscal Year 2016 variable compensation, due to better achievements against Corporate targets in Fiscal Year 2017.

~~Investing Activities~~

Compared to the same year ago period, we used more cash for investing activities during the nine months ended December 31, 2017 for increased investment purchases, net of proceeds received from the sale and maturity of securities in our portfolio. This increase was partially offset by lower capital expenditures.

We estimate total capital expenditures for Fiscal Year 2018 will be approximately $14.0 million to $17.0 million. We expect capital expenditures for the remainder of Fiscal Year 2018 to consist primarily of IT investments, capital investment in our manufacturing capabilities, including tooling for new products, and facilities upgrades.

~~Financing Activities~~

Net cash used for financing activities during the nine months ended December 31, 2017 increased from the prior year period resulting primarily from an increase in cash used for common stock repurchases due to a lower average stock price, partially offset by higher net proceeds from stock-based compensation plans.

On January 30, 2018, we announced that the Audit Committee of our Board ("the Audit Committee") had declared a cash dividend of $0.15 per share, payable on March 9, 2018 to stockholders of record at the close of business on February 20, 2018. We expect to continue paying a quarterly dividend of $0.15 per share; however, the actual declaration of dividends and the establishment of record and payment dates are subject to final determination by the Audit Committee each quarter after its review of our financial performance and financial position.

Liquidity and Capital Resources

AtThe following tables present selected financial information and statistics as of December ~~31, 2017, we had working capital~~26, 2020 and March 28, 2020 and for the first nine months of ~~$619.4 million, including $499.1 million of cash, cash equivalents,~~Fiscal Years 2021 and ~~short-term investments, compared with working capital of $581.8 million, including $480.1 million of cash, cash equivalents, and short-term investments at March 31, 2017.~~ 2020 (in thousands):


	December 26, 2020		March 28, 2020
Cash, cash equivalents, and short-term investments	$	245,345	$	225,720
Property, plant and equipment, net	$	143,489	$	165,858
Long-term debt, net of issuance costs	$	1,576,998	$	1,621,694
Working capital	$	247,045	$	209,203


	Nine Months Ended
	December 26, 2020		December 28, 2019
Cash provided by operating activities	$	71,149	$	16,355
Cash used for investing activities	$	(14,580)	$	(15,637)
Cash used for financing activities	$	(44,442)	$	(45,962)

Our cash and cash equivalents as of December ~~31, 2017~~26, 2020 consisted of bank deposits with third party financial ~~institutions, US Treasury Bills, and Commercial Paper.~~institutions. We monitor bank balances in our operating accounts and adjust the balances as appropriate. Cash balances are held throughout the world, including substantial amounts held outside of the U.S. As of December ~~31, 2017,~~26, 2020, of our ~~$499.1~~$245.3 million of cash, cash equivalents, and short-term investments, ~~$17.8~~$141.2 million was held domestically while ~~$481.2~~$104.1 million was held by foreign subsidiaries, and approximately ~~90% of which~~71% was based in USD-denominated ~~investments.~~

Prior to our third quarter of Fiscal Year 2018, we did not recognize a deferred tax liability related to unremitted foreign earnings because our plans did not require us to repatriate earnings from foreign operations to fund our U.S. operations. The Tax Cuts and Jobs Act (H.R. 1) (the "Act") was signed into law in the U.S. on December 22, 2017, which, among other things, introduced the move from a worldwide to a territorial tax system and imposed a one-time tax on a deemed repatriation of accumulated foreign earnings (hereafter, the "toll charge"). We recorded a $69.3 million toll charge as part of income tax expense in the quarter ended December 31, 2017, representing a provisional estimate of our obligation and which we will pay over an eight-year period as permitted under the Act. We expect to fund payment of the toll charge by repatriating a portion of our foreign earnings and as such, we recorded a deferred tax liability of $5 million related to state income taxes and foreign withholding taxes that will become due as we repatriate foreign earnings. For additional details, refer to Note 13, ~~Income Taxes, in the accompanying footnotes to the condensed consolidated financial statements.~~

instruments. Our primary discretionary cash requirements have historically been for repurchases of our common stock and to fund stockholder dividends. As a result of the issuance of the 5.50% Senior Notes in May 2015, we are required to make interest payments of approximately $13.8 million each November and May through the life of the notes. Both the interest payments on the 5.50% Senior Notes and the payments for the toll charge described above will decrease our liquidity. We generate sufficient operating cash flow and have access to external funding under our revolving credit facility to provide for these payments. For additional details, refer to Note 7, ~~Debt, and Note 13,~~ ~~Income Taxes, in the accompanying footnotes to the condensed consolidated financial statements.~~

~~Our short and long-term investments are intended to establish a high-quality portfolio that preserves principal and meets liquidity needs. As of~~ ~~December 31, 2017, our~~remaining investments were composed of Mutual ~~Funds, US Treasury Notes, Government Agency Securities, Commercial Paper, Corporate Bonds, and Certificates of Deposits ("CDs").~~Funds.

From time to time, depending on market conditions, our Board has authorized plans under which we may repurchase shares of our common stock in the open market or through privately negotiated transactions. During the nine months ended December ~~31, 2017, we repurchased 1,138,903 shares~~26, 2020, cash generated by operating activities of $71.1 million was a result of $68.3 million of net loss, non-cash adjustments to net loss of $172.0 million and a decrease in the net change in operating assets and liabilities of $32.6 million. Cash used in investing activities of $(14.6) million during the nine months ended December 26, 2020 consisted primarily of cash used to acquire property, plant and equipment of $(16.8) million and partially offset by proceeds from assets held for sales of $1.9 million. Cash used in financing activities of $(44.4) million during the nine months ended December 26, 2020 consisted primarily of $47.0 million repayment of long-term debt and $3.2 million for taxes paid on behalf of employees related to net share settlements of vested employee equity awards. The uses of cash were partially offset by $5.7 million of proceeds from issuance of common stock from our Employee Stock Purchase Plan ("ESPP").

During the nine months ended December 28, 2019, cash generated by operating activities of $16.4 million was a result of $(149.3) million of net loss, non-cash adjustments to net loss of $195.2 million and a decrease in the net change in operating assets and liabilities of $(29.6) million. Cash used in investing activities of $(15.6) million during the nine months ended December 28, 2019 consisted primarily of cash used to acquire property, plant and equipment of $(17.0) million partially offset by proceeds from the sale of real property of $2.1 million. Cash used in financing activities of $(46.0) million during the nine months ended December 28, 2019 consisted primarily of early repayment of long-term debt of $(25.0) million, payment of the quarterly dividend on our common stock of $(17.9) million, and taxes paid on behalf of employees related to net share settlements of vested employee equity awards of $(9.7) million. The uses of cash were partially offset by proceeds from issuance of common stock from our Employee Stock Purchase Plan ("ESPP") of $6.6 million.

Debt

In July 2018, in connection with the open market as part of these publicly announced repurchase programs. The total cost of these repurchases was $52.9 million, with an average price of $46.46 per share. In addition, we withheld 210,416 shares with a total value of $11.2 million in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.

~~As of~~ ~~December 31, 2017~~, there remained 730,932 shares authorized for repurchase under the stock repurchase program approved by the Board on July 27, 2017. For more information regarding our stock repurchase programs, refer to Note 10, ~~Common Stock Repurchases, in the accompanying notes to the condensed consolidated financial statements.~~

~~In May 2011,~~Acquisition, we entered into a ~~credit agreement~~Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, National Association, ("as administrative agent, and the ~~Bank"), which was most recently amended in April 2017 (as amended,~~lenders party thereto and borrowed the ~~"Credit Agreement"). The Credit Agreement provides for a $100.0 million unsecured revolving credit facility. Revolving loans~~full amount available under the Credit Agreement will bear interest, at our election, at (i) the Bank’s announced prime rate less 1.20% per annum or (ii) a daily one-month LIBOR rate plus 1.40% per annum. Principal, together with all accruedterm loan facility of $1.245 billion, net of approximately $30 million of discounts and unpaid interest, on the revolving loans is due and payable on May 9, 2020. We are also obligated to pay a commitment fee of 0.37% per annum on the average daily unused amount of the revolving line of credit, which fee shall be payable quarterly in arrears. We may prepay the loans and terminate the commitments under the Credit Agreement at any time, without premium or penalty, subject to the reimbursement of certainissuance costs. During the third quarter of Fiscal Year ~~2018~~2021, we ~~borrowed and repaid $8 million from~~did not repurchase any of our outstanding principal. As of December 26, 2020, we had $1.1 billion of the term loan outstanding.

On February 20, 2020, we entered into an Amendment No. 2 to the Credit Agreement (the “Amendment”) in order to relax certain financial covenants on the revolving line of ~~credit and as of December 31, 2017, we had no outstanding borrowings.~~credit. The ~~line of credit requires us to comply with the following two~~ financial ~~covenant ratios, in each case at each fiscal quarter end and determined on a rolling four-quarter basis:~~

~~maximum ratio of funded debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") of 3.25:1 (previously 3:1); and~~

~~minimum EBITDA coverage ratio, which is calculated as interest payments divided by EBITDA.~~

~~In addition, we and our subsidiaries are required to maintain unrestricted cash, cash equivalents, and marketable securities plus availability~~covenants under the Credit Agreement atare for the end of each fiscal quarter of at least $300.0 million. The Credit Agreement contains customary events of default that include, among other things, payment defaults, covenant defaults, cross-defaults with certain other indebtedness, bankruptcy and insolvency defaults, and judgment defaults. The occurrence of an event of default could result in the accelerationbenefit of the ~~obligations under~~revolving credit lenders only and do not apply to any other debt of the ~~Credit Agreement.~~Company. As of December ~~31, 2017, we were~~26, 2020, the

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Company has five outstanding letters of credit on the revolving credit facility for a total of $1.4 million and had $98.6 million available under the revolving line of credit. As of December 26, 2020, the Company was in compliance with ~~all ratios~~the financial covenants.

On July 30, 2018, we entered into a 4-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $831 million and ~~covenants.~~matures on July 31, 2022. During the nine months ended December 26, 2020, the Company reclassified into interest expense $10.3 million and recorded a $13.1 million unrealized loss on its interest rate swap derivative designated as a cash flow hedge.

During Fiscal Year 2016, we obtained $488.4 million ~~in aggregate principal amount,~~from debt financing, net of issuance ~~costs, from the issuance of our 5.50% Senior Notes.~~costs. The ~~Notes mature~~debt matures on May 31, 2023 and ~~bear~~bears interest at aan annual rate of 5.50% ~~per annum, payable semi-annually~~. During the third quarter of Fiscal Year 2021 we repurchased $12.0 million of our outstanding principal and recorded an immaterial gain on the extinguishment of debt. As of December 26, 2020, we had $477.3 million of debt outstanding.

We may at any time and from time to time, depending on ~~May 15~~market conditions and ~~November 15. A portion~~ prices, continue to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Further information regarding the Company’s debt issuances and related hedging activity can be found in Note 8, Debt and Note 13, Derivatives, of the ~~proceeds was used~~accompanying notes to ~~repay all then-outstanding amounts under~~condensed consolidated financial statements.

Capital Return Program

On November 28, 2018, the Board approved a 1 million share repurchase program expanding our ~~revolving line~~capacity to repurchase shares to approximately 1.7 million shares. During the first three quarters of ~~credit agreement with Wells Fargo Bank and the remaining proceeds were used primarily for share repurchases.~~

~~Our liquidity, capital resources, and results of operations in~~Fiscal Year 2021, we did not repurchase any ~~period could be affected by repurchases~~shares of our common stock. As of December 26, 2020, there remained 1,369,014 shares authorized for repurchase under the existing stock repurchase program. See Note 11, Common Stock Repurchases, of the payment of cash dividends, the exercise of outstanding stock options, restricted stock grants under stock plans, and the issuance of common stock under our Employee Stock Purchase Plan ("ESPP"). We receive cash from the exercise of outstanding stock options under our stock plan and the issuance of shares under our ESPP. However, the resulting increase in the number of outstanding shares from these equity grants and issuances could affect our earnings per share. We cannot predict the timing or amount of proceeds from the sale or exercise of these securities or whether they will be exercised, forfeited, canceled, or will expire.accompanying notes to condensed consolidated financial statements.

We believe that our current cash and cash equivalents, short-term investments, cash provided by operations, and ~~the~~ availability of additional funds under the Credit Agreement, as amended from time to time, will be sufficient to fund our operations for ~~at least~~one year from the ~~next 12 months; however,~~date of issuance of these financial statements. However, any projections of future financial needs and sources of working capital are subject to ~~uncertainty.~~uncertainty on our financial results. Readers are cautioned to review the risks, uncertainties, and assumptions set forth in this Quarterly Report on Form 10-Q, including the section entitled ~~"Certain~~"Certain Forward-Looking ~~Information"~~Information" and the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended March ~~31, 2017,~~28, 2020, filed with the SEC on ~~May 10, 2017,~~June 8, 2020, and other periodic filings with the SEC, any of which could affect our estimates for future financial needs and sources of working capital.

OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

We have not entered into any transactions with unconsolidated entities ~~giving rise to~~whereby we have financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides us with financing and liquidity support, market risk, or credit risk support.

Consigned Inventory

A substantial portion of the raw materials, components, and subassemblies used in our products are provided by our suppliers on a consignment basis. These consigned inventories are not recorded on our consolidated balance sheet until we take title to the raw materials, components, and subassemblies, which occurs when they are consumed in the production process. Prior to consumption in the production process, our suppliers bear the risk of loss and retain title to the consigned inventory. The ~~terms of the~~ agreements allow us to return parts in excess of maximum order quantities to the suppliers at the supplier’s expense. Returns for other reasons are negotiated with the suppliers on a case-by-case basis and to date have been immaterial. If our suppliers were to discontinue financing consigned inventory, it would require us to make cash outlays and we could incur expenses which, if material, could negatively affect our business and financial results. As of December 26, 2020, and March ~~31, 2017~~ ~~and December 31, 2017,~~28, 2020, we had off-balance sheet consigned inventories of ~~$52.3~~$45.3 million and ~~$56.1~~$21.7 million, respectively.

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Unconditional Purchase Obligations

We ~~utilize~~use several contract manufacturers to ~~procure~~manufacture raw materials, components, and subassemblies for our ~~products. We provide these contract manufacturers with~~products through our supply of demand information that typically covers periods up to 13 ~~weeks, and they~~weeks. The contract manufacturers use this information to acquire components and build products. We also obtain individual components for our products from a wide variety of individual ~~suppliers. Consistent with industry practice, we acquire components through~~suppliers using a combination of purchase orders, supplier contracts, including annual minimum purchase obligations, and open orders based on projected demand information. As of December ~~31, 2017,~~26, 2020, we had outstanding off-balance sheet third-party manufacturing, component purchase, and other general and administrative commitments of ~~$192.3~~$501.1 million, including the off-balance sheet consigned inventories of ~~$56.1 million as discussed above.~~$45.3 million.

During the quarter ended December 31, 2017, our short and long-term tax obligations increased due to introduction of the Tax Cuts and Jobs Act (H.R. 1) (the “Act”), signed into law on December 22, 2017 and requiring the payment of a one-time deemed repatriation of accumulated unremitted earnings (the "toll charge"). As permitted under the Act, we have elected to pay the toll charge obligation over an 8-year period, as follows:

(in millions) Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years
Toll charge $ 69.3
$ 5.5
$ 11.0
$ 11.2
$ 41.6

~~For additional details regarding the Act and the toll charge, refer to Note 13,~~ ~~Income Taxes, in the accompanying footnotes to the condensed consolidated financial statements.~~

Except as described above, there have been no material changes in our contractual obligations as described in our Annual Report on Form 10-K for the fiscal year ended March ~~31, 2017.~~28, 2020.

CRITICAL ACCOUNTING ESTIMATES

For a complete description of what we believe to be the critical accounting estimates used in the preparation of our condensed consolidated financial statements, refer to our Annual Report on Form 10-K for the fiscal year ended March ~~31, 2017~~,28, 2020, filed with the SEC on ~~May 10, 2017~~.

During the quarter ended December 31, 2017, the Tax Cuts and Jobs Act (H.R. 1) (the “Act”) was signed into law in the United States. The Act includes several changes to existing tax law, including, among other things, a permanent reduction in the corporate income tax rate from 35% to 21% and the move from a worldwide to a territorial tax system. The move to a territorial tax system was accompanied by federal taxation of a one-time deemed repatriation of accumulated unremitted earnings (hereafter, the "toll charge"). The toll charge is a provisional estimate and is based on the application of certain tax rates to foreign unremitted cash and cash equivalents and permanently reinvested foreign assets. Our estimate of the toll charge obligation may change due to changes in interpretations of the Act, legislative action to address questions that arise because of the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates we have utilized to calculate the transition impacts, including impacts from foreign exchange rates of foreign subsidiaries and the effects of inflation. We will finalize the estimate within a twelve-month period from the date of enactment of December 22, 2017.

In addition, prior to our third quarter of Fiscal Year 2018, we did not recognize a deferred tax liability related to unremitted foreign earnings because our plans did not require the Company to repatriate earnings from foreign operations to fund U.S. operations. We expect to fund payment of the toll charge by repatriating a portion of our foreign earnings and as such, have recorded a deferred tax liability related to state income taxes and foreign withholding taxes that will become due as the Company repatriates foreign earnings.

~~Refer to additional details surrounding impacts of the Act at Note 13,~~ ~~Income Taxes, in the accompanying footnotes to the condensed consolidated financial statements.~~

~~Other than the above item, there~~June 8, 2020. There have been no material changes to our critical accounting estimates during the nine months ended December ~~31, 2017.~~26, 2020.

Recent Accounting Pronouncements

For more information regarding the Recent Accounting Pronouncements that may impact us, ~~refer to~~see Note 2, Recent Accounting Pronouncements, of the accompanying notes to the condensed consolidated financial statements.

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Financial Statements (Unaudited)

PLANTRONICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(Unaudited)


	March 31, 2017			December 31, 2017				December 26, 2020		March 28, 2020
ASSETS							ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	301,970		$	280,293		Cash and cash equivalents	$	230,065	$	213,879
Short-term investments	178,179			218,773			Short-term investments	15,280		11,841
Accounts receivable, net	141,177			143,919			Accounts receivable, net	315,477		246,835
Inventory, net	55,456			64,574			Inventory, net	190,468		164,527
Other current assets	22,195			19,460			Other current assets	62,996		47,946
Total current assets	698,977			727,019			Total current assets	814,286		685,028
Long-term investments	127,176			118,870

Property, plant, and equipment, net	150,307			144,802			Property, plant, and equipment, net	143,489		165,858
Goodwill and purchased intangibles, net	15,577			15,498
Goodwill							Goodwill	796,216		796,216
Purchased intangibles, net							Purchased intangibles, net	372,047		466,915
Deferred tax assets	23,242			14,783			Deferred tax assets	98,386		82,496
Other assets	1,880			1,681			Other assets	54,298		60,661
Total assets	$	1,017,159		$	1,022,653		Total assets	$	2,278,722	$	2,257,174

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' DEFICIT							LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:							Current liabilities:
Accounts payable	$	42,885		$	45,685		Accounts payable	$	165,958	$	102,159
Accrued liabilities	74,285			61,906			Accrued liabilities	401,283		373,666
Total current liabilities	117,170			107,591			Total current liabilities	567,241		475,825
Long term debt, net of issuance costs	491,059			492,146			Long term debt, net of issuance costs	1,576,998		1,621,694

Long-term income taxes payable	11,729			74,476			Long-term income taxes payable	90,980		98,319

Other long-term liabilities	15,045			19,419			Other long-term liabilities	156,524		144,152
Total liabilities	$	635,003		$	693,632		Total liabilities	2,391,743		2,339,990
Commitments and contingencies (Note 6)
Stockholders' equity:
Commitments and contingencies (Note 7)							Commitments and contingencies (Note 7)	0		0
Stockholders' deficit:							Stockholders' deficit:
Common stock	$	804		$	814		Common stock	907		896
Additional paid-in capital	818,777			858,253			Additional paid-in capital	1,538,160		1,501,340
Accumulated other comprehensive income	4,694			1,905
Retained earnings	319,931			294,200
Accumulated other comprehensive loss							Accumulated other comprehensive loss	(9,121)		(13,582)
Accumulated deficit							Accumulated deficit	(776,208)		(707,904)
Total stockholders' equity before treasury stock	1,144,206			1,155,172			Total stockholders' equity before treasury stock	753,738		780,750
Less: Treasury stock, at cost	(762,050		)	(826,151		)	Less: Treasury stock, at cost	(866,759)		(863,566)
Total stockholders' equity	382,156			329,021
Total liabilities and stockholders' equity	$	1,017,159		$	1,022,653
Total stockholders' deficit							Total stockholders' deficit	(113,021)		(82,816)
Total liabilities and stockholders' deficit							Total liabilities and stockholders' deficit	$	2,278,722	$	2,257,174

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

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PLANTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Net revenues
Net product revenues	$	420,711	$	316,633	$	1,059,846	$	1,094,515
Net service revenues	63,974		67,838		191,529		199,432
Total net revenues	484,685		384,471		1,251,375		1,293,947
Cost of revenues
Cost of product revenues	236,842		220,469		622,718		658,408
Cost of service revenues	21,186		20,156		64,921		72,976
Total cost of revenues	258,028		240,625		687,639		731,384
Gross profit	226,657		143,846		563,736		562,563
Operating expenses:
Research, development, and engineering	54,150		53,769		156,327		170,708
Selling, general, and administrative	129,641		144,978		361,892		457,004
(Gain) loss, net from litigation settlements	0		0		17,561		(1,162)
Restructuring and other related charges	13,977		21,724		49,477		47,096
Total operating expenses	197,768		220,471		585,257		673,646
Operating income (loss)	28,889		(76,625)		(21,521)		(111,083)
Interest expense	(18,417)		(22,533)		(58,182)		(70,262)
Other non-operating income, net	2,596		967		4,188		675
Income (loss) before income taxes	13,068		(98,191)		(75,515)		(180,670)
Income tax benefit	(7,045)		(19,708)		(7,208)		(31,406)
Net income (loss)	$	20,113	$	(78,483)	$	(68,307)	$	(149,264)

Earnings (loss) per common share:
Basic	$	0.49	$	(1.97)	$	(1.67)	$	(3.78)
Diluted	$	0.48	$	(1.97)	$	(1.67)	$	(3.78)

Shares used in computing earnings (loss) per common share:
Basic	41,252		39,784		40,894		39,535
Diluted	42,184		39,784		40,894		39,535

Three Months Ended December 31, Nine Months Ended
December 31,
2016 2017 2016 2017
Net revenues $ 232,933
$ 226,534
$ 672,222
$ 640,760
Cost of revenues 122,753
112,409
338,523
315,720
Gross profit 110,180
114,125
333,699
325,040
Operating expenses:
Research, development, and engineering 21,393
21,257
66,116
62,402
Selling, general, and administrative 56,919
56,196
169,581
170,125
(Gain) loss, net from litigation settlements (103 ) (15 ) 4,287
(295 )
Restructuring and other related charges (credits) 113
(84 ) (1,350 ) 2,438
Total operating expenses 78,322
77,354
238,634
234,670
Operating income 31,858
36,771
95,065
90,370
Interest expense (7,322 ) (7,341 ) (21,867 ) (21,904 )
Other non-operating income and (expense), net 427
2,490
4,119
5,230
Income before income taxes 24,963
31,920
77,317
73,696
Income tax expense 2,742
81,424
14,235
84,419
Net income (loss) $ 22,221
$ (49,504 ) $ 63,082
$ (10,723 )

Earnings (Loss) per common share:
Basic $ 0.69
$ (1.54 ) $ 1.96
$ (0.33 )
Diluted $ 0.68
$ (1.54 ) $ 1.92
$ (0.33 )

Shares used in computing earnings (loss) per common share:
Basic 32,242
32,075
32,260
32,384
Diluted 32,826
32,075
32,895
32,384

Cash dividends declared per common share $ 0.15
$ 0.15
$ 0.45
$ 0.45

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

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PLANTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Net income (loss)	$	20,113	$	(78,483)	$	(68,307)	$	(149,264)
Other comprehensive income (loss):
Foreign currency translation adjustments	0		0		0		(219)
Unrealized gains (losses) on cash flow hedges:
Unrealized cash flow hedge gains (losses) arising during the period	(3,754)		(1,420)		(8,339)		(5,755)
Net (gains) losses reclassified into income for revenue hedges	1,054		(225)		1,797		(3,152)
Net (gains) losses reclassified into income for cost of revenue hedges	0		(46)		0		(212)
Net (gains) losses reclassified into income for interest rate swaps	3,039		1,565		10,290		3,162
Net unrealized gains (losses) on cash flow hedges	339		(126)		3,748		(5,957)



Aggregate income tax benefit (expense) of the above items	599		81		1,122		1,228
Other comprehensive income (loss)	938		(45)		4,870		(4,948)
Comprehensive income (loss)	$	21,051	$	(78,528)	$	(63,437)	$	(154,212)

Three Months Ended December 31, Nine Months Ended
December 31,
2016 2017 2016 2017
Net income (loss) $ 22,221
$ (49,504 ) $ 63,082
$ (10,723 )
Other comprehensive income (loss):
Foreign currency translation adjustments 82
—
(168 ) 257
Unrealized gains (losses) on cash flow hedges:
Unrealized cash flow hedge gains (losses) arising during the period 2,090
(446 ) 2,394
(5,093 )
Net (gains) losses reclassified into income for revenue hedges (2,178 ) 1,357
(3,163 ) 2,506
Net (gains) losses reclassified into income for cost of revenue hedges 756
(61 ) 2,072
(193 )
Net unrealized gains (losses) on cash flow hedges 668
850
1,303
(2,780 )
Unrealized gains (losses) on investments:
Unrealized holding gains (losses) during the period (628 ) (658 ) (586 ) (449 )

Aggregate income tax benefit (expense) of the above items 156
181
130
182
Other comprehensive income (loss) 278
373
679
(2,790 )
Comprehensive income (loss) $ 22,499
$ (49,131 ) $ 63,761
$ (13,513 )

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

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PLANTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Nine Months Ended
	December 31,							Nine Months Ended
	2016			2017				December 26, 2020		December 28, 2019
CASH FLOWS FROM OPERATING ACTIVITIES							CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	63,082		$	(10,723	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net loss							Net loss	$	(68,307)	$	(149,264)
Adjustments to reconcile net loss to net cash provided by operating activities:							Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	15,624			15,894			Depreciation and amortization	124,881		172,630
Amortization of debt issuance costs	1,087			1,087			Amortization of debt issuance costs	3,962		4,062
Stock-based compensation	25,005			26,047			Stock-based compensation	31,104		41,499
Deferred income taxes	(753		)	10,490			Deferred income taxes	(15,373)		(62,436)
Provision for excess and obsolete inventories	1,292			2,013			Provision for excess and obsolete inventories	12,767		19,076
Restructuring and related charges (credits)	(1,350		)	2,438
Restructuring and other related charges							Restructuring and other related charges	49,477		47,096
Cash payments for restructuring charges	(3,793		)	(2,911		)	Cash payments for restructuring charges	(28,794)		(29,885)
Other operating activities	633			(645		)	Other operating activities	(6,000)		3,201
Changes in assets and liabilities:
Changes in assets and liabilities, net of acquisition:							Changes in assets and liabilities, net of acquisition:
Accounts receivable, net	(13,448		)	(3,153		)	Accounts receivable, net	(71,439)		34,634
Inventory, net	(5,990		)	(9,577		)	Inventory, net	(39,941)		(49,320)
Current and other assets	(2,346		)	(3,066		)	Current and other assets	(15,246)		24,142
Accounts payable	3,626			2,783			Accounts payable	62,454		(10,690)
Accrued liabilities	6,191			(15,695		)	Accrued liabilities	47,529		(46,906)
Income taxes	(1,141		)	66,387			Income taxes	(15,925)		18,516
Cash provided by operating activities	87,719			81,369			Cash provided by operating activities	71,149		16,355
CASH FLOWS FROM INVESTING ACTIVITIES							CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of investments	143,631			54,411			Proceeds from sales of investments	667		177
Proceeds from maturities of investments	97,253			146,989

Purchase of investments	(247,491		)	(232,840		)	Purchase of investments	(394)		(972)

Capital expenditures	(19,603		)	(9,403		)	Capital expenditures	(16,753)		(16,984)
Proceeds from sale of property and equipment							Proceeds from sale of property and equipment	1,900		2,142
Cash used for investing activities	(26,210		)	(40,843		)	Cash used for investing activities	(14,580)		(15,637)
CASH FLOWS FROM FINANCING ACTIVITIES							CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock	(34,236		)	(52,915		)

Employees' tax withheld and paid for restricted stock and restricted stock units	(9,444		)	(11,186		)	Employees' tax withheld and paid for restricted stock and restricted stock units	(3,193)		(9,669)
Proceeds from issuances under stock-based compensation plans	6,516			13,446			Proceeds from issuances under stock-based compensation plans	5,731		6,617
Proceeds from revolving line of credit	—			8,000			Proceeds from revolving line of credit	50,000		0
Repayments of revolving line of credit	—			(8,000		)	Repayments of revolving line of credit	(50,000)		0

Payment of cash dividends	(14,947		)	(15,008		)	Payment of cash dividends	0		(17,910)
Other financing activity	761			—
Repayments of long-term debt							Repayments of long-term debt	(46,980)		(25,000)

Cash used for financing activities	(51,350		)	(65,663		)	Cash used for financing activities	(44,442)		(45,962)
Effect of exchange rate changes on cash and cash equivalents	(2,964		)	3,460			Effect of exchange rate changes on cash and cash equivalents	4,059		(444)
Net increase (decrease) in cash and cash equivalents	7,195			(21,677		)	Net increase (decrease) in cash and cash equivalents	16,186		(45,688)
Cash and cash equivalents at beginning of period	235,266			301,970			Cash and cash equivalents at beginning of period	213,879		202,509
Cash and cash equivalents at end of period	$	242,461		$	280,293		Cash and cash equivalents at end of period	$	230,065	$	156,821
SUPPLEMENTAL NON-CASH DISCLOSURES
Accounts payable for purchases of property, plant, and equipment	$	1,052		$	3,895
SUPPLEMENTAL DISCLOSURES							SUPPLEMENTAL DISCLOSURES
Cash paid for income taxes							Cash paid for income taxes	$	20,484	$	9,853
Cash paid for interest							Cash paid for interest	$	63,869	$	68,039

Table of excess tax benefits and deficiencies recognized in the provision for income taxes will fluctuate from period-to-period based on the price of the Company’s stock, the volume of share-based instruments settled or vested, and the value assigned to share-based instruments under U.S. GAAP. Refer to additional discussion in Note 13, ~~Income Taxes~~.Contents

3. CASH, CASH EQUIVALENTS, AND INVESTMENTS

The following tables summarize the Company’s cash, cash equivalents, and ~~available-for-sale securities’ amortized~~investments’ adjusted cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category recorded as cash and cash equivalents, and short-term ~~or long-term~~ investments as of December ~~31, 2017~~26, 2020 and March ~~31, 2017~~28, 2020 (in thousands):


December 26, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash & Cash Equivalents		Short-term investments (due in 1 year or less)
Cash	$	205,058	$	—	$	—	$	205,058	$	205,058	$	—
Level 1:
Mutual Funds	13,957		1,360		(37)		15,280		0		15,280

Money Market Funds	25,007		0		0		25,007		25,007









Total cash, cash equivalents and investments measured at fair value	$	244,022	$	1,360	$	(37)	$	245,345	$	230,065	$	15,280

December 31, 2017 Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value Cash & Cash Equivalents Short-term investments (due in 1 year or less) Long-term investments (due in 1 to 3 years)
Cash $ 272,063
$ —
$ —
$ 272,063
$ 272,063
$ —
$ —
Level 1:
Mutual Funds 14,298
399
(70 ) 14,627
—
14,627
—
US Treasury Notes 71,684
—
(210 ) 71,474
4,998
42,348
24,128
Money Market Funds 239
—
—
239
239
—
—
Subtotal 86,221
399
(280 ) 86,340
5,237
56,975
24,128
Level 2:
Government Agency Securities 56,667
—
(276 ) 56,391
—
31,300
25,091
Commercial Paper 32,944
—
—
32,944
2,993
29,951
—
Corporate Bonds 142,148
45
(375 ) 141,818
—
77,175
64,643
Certificates of Deposits ("CDs") 28,383
—
(3 ) 28,380
—
23,372
5,008
Subtotal 260,142
45
(654 ) 259,533
2,993
161,798
94,742

Total cash, cash equivalents
and investments measured at fair value $ 618,426
$ 444
$ (934 ) $ 617,936
$ 280,293
$ 218,773
$ 118,870


March 28, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash & Cash Equivalents		Short-term investments (due in 1 year or less)
Cash	$	213,879	$	—	$	—	$	213,879	$	213,879	$	—
Level 1:
Mutual Funds	12,938		31		(1,128)		11,841		0		11,841











Total cash, cash equivalents and investments measured at fair value	$	226,817	$	31	$	(1,128)	$	225,720	$	213,879	$	11,841

March 31, 2017 Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value Cash & Cash Equivalents Short-term investments (due in 1 year or less) Long-term investments (due in 1 to 3 years)
Cash $ 295,877
$ —
$ —
$ 295,877
$ 295,877
$ —
$ —
Level 1:
Mutual Funds 12,079
352
(32 ) 12,399
—
12,399
—
US Treasury Notes 35,960
—
(68 ) 35,892
—
17,560
18,332
Money Market Funds —
—
—
—
—
—
—
Subtotal 48,039
352
(100 ) 48,291
—
29,959
18,332
Level 2:
Government Agency Securities 54,415
20
(164 ) 54,271
—
15,309
38,962
Commercial Paper 47,152
—
—
47,152
6,093
41,059
—
Corporate Bonds 141,508
64
(224 ) 141,348
—
73,676
67,672
Certificates of Deposits ("CDs") 20,383
3
—
20,386
—
18,176
2,210
Subtotal 263,458
87
(388 ) 263,157
6,093
148,220
108,844

Total cash, cash equivalents
and investments measured at fair value $ 607,374
$ 439
$ (488 ) $ 607,325
$ 301,970
$ 178,179
$ 127,176

As of December ~~31, 2017~~26, 2020, and March ~~31, 2017, with the exception of assets related to the Company's deferred compensation plan,~~28, 2020, all of the Company's investments are classified as ~~available-for-sale securities. The carrying~~trading securities and are reported at fair value, ~~of available-for-sale securities~~with unrealized gains and losses included in ~~cash equivalents approximates fair value because of the short maturity of those instruments.~~current period earnings. For more information regarding the Company's deferred compensation plan, ~~refer to~~see Note 4, Deferred Compensation.

The Company did ~~not~~0t incur any material realized or unrealized gains or losses in the three months ended December 26, 2020, and December 28, 2019. The Company recognized an immaterial realized gain and an unrealized gain of $2.5 million during the nine months ended December ~~31, 2016 and 2017.~~26, 2020. The Company did 0t incur any material realized or unrealized gains or losses in the nine months ended December 28, 2019.

There were no transfers between fair value measurement levels during the three and nine months ended December ~~31, 2016~~26, 2020, and ~~2017.~~December 28, 2019.

All financial assets and liabilities are recognized or disclosed at fair value in the financial ~~statements or the accompanying notes thereto.~~statements. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1

The Company's Level 1 financial assets consist of Mutual Funds and ~~US Treasury Notes.~~Money Market Funds. The fair value of Level 1 financial instruments is measured based on the quoted market price of identical securities.

Level 2

The Company's Level 2 financial assets and liabilities consist of ~~Government Agency Securities, Commercial Paper, Corporate Bonds, and Certificates of Deposits ("CDs"),~~ derivative foreign currency contracts, an interest rate swap, a term loan facility, and ~~long-term debt.~~5.50% Senior Notes. The fair value of Level 2 investment securities is determined based on other observable inputs, including multiple non-binding quotes from independent pricing services. Non-binding quotes are based on proprietary valuation models that are prepared by the independent pricing services and use algorithms based on inputs such as observable market data, quoted market prices for similar securities, issuer spreads, and internal assumptions of the broker. The Company corroborates the reasonableness of non-binding quotes received from the independent pricing services using a variety of techniques depending on the underlying instrument, including: (i) comparing them to actual experience gained from the purchases and maturities of investment securities, (ii) comparing them to internally developed cash flow models based on observable inputs, and (iii) monitoring changes in ratings of similar securities and the related impact on fair value. The fair value of Level 2 derivative foreign currency contracts isand interest rate swap are determined using pricing models that use observable market inputs. For more information regarding the Company's derivative assets and liabilities, ~~refer to~~see Note ~~12,~~ ~~Foreign Currency~~ 13, Derivatives. The fair value of the Level 2 ~~long-term debt is~~5.50% Senior Notes and term loan facility are determined based on inputs that were observable in the market, including the trading price of the notes when available. For more information regarding the Company's 5.50% Senior Notes ~~refer to~~and term loan facility, see Note 7, ~~Debt.~~8, Debt.

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Level 3

The Company's ~~unsecured~~ revolving credit facility falls under the Level 3 hierarchy. The fair value of the ~~Company’s line of~~Level 3 revolving credit ~~approximates its carrying value because~~facility is determined based on inputs that were unobservable in the ~~interest rate is variable and approximates rates currently available~~market. For more information regarding the Company's debt, refer to ~~the Company.~~ Note 8, Debt.

4. DEFERRED COMPENSATION

As of December ~~31, 2017,~~26, 2020, the Company held ~~bank deposits of $0.8 million and~~ investments in mutual funds with a fair value totaling ~~$14.6~~$15.3 million, all of which related to debt and equity securities that are held in rabbi trusts under non-qualified deferred compensation plans. The ~~total~~total related deferred compensation liability was ~~$15.9~~$15.3 million at December ~~31, 2017.~~ 26, 2020. As of March ~~31, 2017,~~28, 2020, the Company held ~~bank deposits of $0.8 million and~~ investments in mutual funds with a fair value totaling ~~$12.4 million.~~$11.8 million, all of which related to debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans. The total related deferred compensation liability at March ~~31, 2017~~28, 2020 was ~~$13.7~~$11.7 million.

~~The bank deposits are recorded on the condensed consolidated balance sheets under "cash and cash equivalents".~~ The securities are classified as trading securities and are recorded on the condensed consolidated balance sheets under "short-term investments". The liability is recorded on the condensed consolidated balance sheets under "other long-term liabilities" and "accrued liabilities".

5. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS

Accounts receivable, net:


(in thousands)	December 26, 2020		March 28, 2020
Accounts receivable	$	402,285	$	350,642

Provisions for promotions, rebates, and other	(81,802)		(101,666)
Provisions for doubtful accounts and sales allowances	(5,006)		(2,141)
Accounts receivable, net	$	315,477	$	246,835

The Company maintains a provision for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers’ financial conditions and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks, and economic conditions that may affect a customer’s ability to pay, including any reasonable and supportable forecasts of the future.

For the period ended December 26, 2020, our assessment considered business and market disruptions caused by COVID-19 and estimates of credit and collectability trends. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict, causing variability and volatility that may impact our allowance for credit losses in future periods.

As a result of the Acquisition, the Company assumed a financing agreement with an unrelated third-party financing company (the "Financing Agreement") whereby the Company offers distributors and resellers direct or indirect financing on their purchases of Polycom's products and services. In return, the Company agrees to pay the financing company a fee based on a pre-defined percentage of the transaction amount financed. In certain instances, these financing arrangements result in a transfer of the Company's receivables, without recourse, to the financing company. If the transaction meets the applicable criteria under Topic 860 and is accounted for as a sale of financial assets, the related accounts receivable is excluded from the balance sheet upon receipt of the third-party financing company's payment remittance. In certain legal jurisdictions, the arrangements that involve maintenance services or products bundled with maintenance at one price do not qualify as a sale of financial assets in accordance with the authoritative guidance. Accordingly, accounts receivable related to these arrangements are accounted for as a secured borrowing in accordance with Topic 860, and the Company records a liability for any cash received, while maintaining the associated accounts receivable balance until the distributor or reseller remits payment to the third-party financing company.

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March 31, December 31,
(in thousands) 2017 2017
Accounts receivable $ 184,759
$ 196,175
Provisions for returns (10,541 ) (11,438 )
Provisions for promotions, rebates, and other (32,438 ) (39,886 )
Provisions for doubtful accounts and sales allowances (603 ) (932 )
Accounts receivable, net $ 141,177
$ 143,919

During the quarter ended December 26, 2020, total transactions entered pursuant to the terms of the Financing Agreement were approximately $21.8 million all of which related to the transfer of the financial assets outside of the United States. During the quarter ended December 28, 2019, total transactions entered pursuant to the terms of the Financing Agreement were approximately $36.0 million, of which $26.2 million was related to the transfer of the financial assets outside of the United States. The financing of these receivables accelerated the collection of cash and reduced the Company's credit exposure. Included in "Accounts receivables, net" in the Company's condensed consolidated balance sheets as of December 26, 2020 and March 28, 2020 was approximately $11.8 million and $22.5 million, respectively due from the financing company, of which $11.8 million and $16.5 million, respectively was related to accounts receivable transferred outside of the United States. Total fees incurred pursuant to the Financing Agreement were immaterial for the quarters ended December 26, 2020 and December 28, 2019. These fees are recorded as a reduction to revenue on the Company's condensed consolidated statements of operations.

Inventory, net:


(in thousands)	December 26, 2020		March 28, 2020
Raw materials	$	95,195	$	97,371
Work in process	9,392		459
Finished goods	85,881		66,697
Inventory, net	$	190,468	$	164,527

March 31, December 31,
(in thousands) 2017 2017
Raw materials $ 20,260
$ 23,485
Work in process 215
243
Finished goods 34,981
40,846
Inventory, net $ 55,456
$ 64,574

Accrued Liabilities:


(in thousands)	December 26, 2020		March 28, 2020
Short term deferred revenue	$	146,887	$	144,040
Employee compensation and benefits	88,142		48,153









Accrued other	166,254		181,473
Accrued liabilities	$	401,283	$	373,666

March 31, December 31,
(in thousands) 2017 2017
Employee compensation and benefits $ 36,415
$ 23,719
Accrued interest on 5.50% Senior Notes 10,407
3,419
Warranty obligation 6,863
7,418
VAT/Sales tax payable 5,433
6,182
Derivative liabilities 1,323
4,425
Accrued other 13,844
16,743
Accrued liabilities $ 74,285
$ 61,906

The Company's warranty obligation is included as a component of accrued liabilities on the condensed consolidated balance sheets. Changes in the warranty obligation during the nine months ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019 were as follows:


	Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019
Warranty obligation at beginning of period	$	15,261	$	17,984

Warranty provision related to products shipped	17,092		14,235
Deductions for warranty claims processed	(12,736)		(16,015)
Adjustments related to preexisting warranties	(4,097)		(590)
Warranty obligation at end of period(1)	$	15,520	$	15,614

Nine Months Ended
December 31,
(in thousands) 2016 2017
Warranty obligation at beginning of period $ 8,537
$ 8,697
Warranty provision related to products shipped 7,248
7,367
Deductions for warranty claims processed (7,246 ) (7,711 )
Adjustments related to preexisting warranties 408
1,086
Warranty obligation at end of period⁽¹⁾
$ 8,947
$ 9,439

⁽¹⁾~~Includes both short-term and long-term portion~~

Table of warranty obligation; the prior table shows only the short-term portion included in accrued liabilities on our condensed consolidated balance sheet. The long-term portion is included in other long-term liabilities.Contents

6. GOODWILL AND PURCHASED INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill allocated to the Company's reporting segments for the periods ended December 26, 2020 and March 28, 2020 are as follows:


(in thousands)	Poly Reportable Segment		Products Reportable Segment		Services Reportable Segment		Total Consolidated
Balance as of March 30, 2019	$	1,278,380	$	0	$	0	$	1,278,380
Adjustments(1)	1,517						1,517
Impairment prior to re-segmentation	(323,088)		0		0		(323,088)
Allocation due to re-segmentation	(956,809)		789,561		167,248		0
Impairment after re-segmentation	0		(160,593)		0		(160,593)
Balance as of March 28, 2020	$	0	$	628,968	$	167,248	$	796,216
Balance as of December 26, 2020	$	0	$	628,968	$	167,248	$	796,216

(1) Represents measurement period adjustments.

During the fourth quarter of Fiscal Year 2020, the Company experienced a sustained decrease in its stock price and determined that it was more likely than not that the carrying value of the Company's reporting units exceeded their fair value. Additionally, during the fourth quarter of Fiscal Year 2020, the Company made key changes to its executive management, which ultimately resulted in a change to the composition of its reportable segments and consequently a change from 1 to 4 reporting units – Headsets, Voice, Video, and Services. These changes resulted in an impairment charge of $483.7 million in the fourth quarter of Fiscal Year 2020.

Other Intangible Assets

As of December 26, 2020, and March 28, 2020, the carrying value of other intangibles, is as follows:


As of	December 26, 2020						March 28, 2020
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Useful Life
Amortizing Assets
Existing technology	$	427,123	$	(260,833)	$	166,290	$	427,123	$	(208,848)	$	218,275	2.6 years
Customer relationships	240,024		(117,756)		122,268		240,024		(84,506)		155,518		3.4 years
Trade name/Trademarks	115,600		(32,111)		83,489		115,600		(22,478)		93,122		6.5 years
Total intangible assets	$	782,747	$	(410,700)	$	372,047	$	782,747	$	(315,832)	$	466,915	3.7 years

During the three and nine months ended December 26, 2020, the Company recognized $30.7 million and $94.5 million, respectively, in amortization expense. During the three and nine months ended December 28, 2019 the Company recognized $46.1 million and $137.4 million, respectively, in amortization expense.

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As of December 26, 2020, expected amortization expense for other intangible assets for each of the next five years and thereafter is as follows:


in thousands	Amount
2021 (remaining three months)	$	30,434
2022	113,858
2023	111,232
2024	65,936
2025	21,688
Thereafter	28,899
	$	372,047

7. COMMITMENTS AND CONTINGENCIES

Future Minimum Rental Payments

Future minimum lease payments under non-cancelable operating leases as of December 26, 2020 were as follows:


(in thousands)	Operating Leases(1)
2021 (remaining three months)	$	6,394
2022	23,052
2023	9,265
2024	7,238
2025	5,627
Thereafter	16,274
Total lease payments	$	67,850
Less: Imputed interest(2)	(7,503)
Present value of lease liabilities	$	60,347

(1) The weighted average remaining lease term was 4.3 years as of December 26, 2020.

(2) The weighted average discount rate was 4.8% as of December 26, 2020.

Unconditional Purchase Obligations

The Company purchases materials and services from a variety of suppliers and manufacturers. During the normal course of business and to manage manufacturing operations and general and administrative activities, the Company may enter into firm, non-cancelable, and unconditional purchase obligations for which amounts are not recorded on the consolidated balance sheets. As of December ~~31, 2017~~,26, 2020, the Company had outstanding off-balance sheet third-party manufacturing, component purchase, and other general and administrative commitments of ~~$192.3~~$501.1 million.

Other Guarantees and Obligations

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, purchasers of assets or subsidiaries and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of agreements or representations and warranties made by the Company, services to be provided by the Company, intellectual property infringement claims made by third parties or, with respect to the sale of assets of a subsidiary, matters related to the Company's conduct of business and tax matters prior to the sale. From time to time, the Company indemnifies customers against combinations of loss, expense, or liability arising from various triggering events relating to the sale and use of its products and services.

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In addition, the Company also provides indemnification to customers against claims related to undiscovered liabilities, additional product liability, or environmental obligations. The Company has also entered into indemnification agreements with its directors, officers and certain other personnel that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers of the Company or certain of its affiliated entities. The Company maintains director and officer liability insurance, which may cover certain liabilities arising from its obligation to indemnify its directors, officers and certain other personnel in certain circumstances. It is not possible to determine the aggregate maximum potential loss under these agreements due to the limited history of prior claims and the unique facts and circumstances involved in each particular claim. Such indemnification obligations might not be subject to maximum loss clauses. Historically, the Company has not incurred material costs as a result of obligations under these agreements and it has not accrued any liabilities related to such indemnification obligations in the condensed consolidated financial statements.

Claims and Litigation

On ~~October 12, 2012, GN Netcom,~~January 23, 2018, FullView, Inc. ~~("GN") sued the Company~~filed a complaint in the United States District Court of the Northern District of California against Polycom, Inc. alleging infringement of two patents and thereafter filed a similar complaint in connection with the same patents in Canada. Polycom thereafter filed an inter partes reexamination ("IPR") of one of the patents, which was then appealed to Federal Circuit Court and denied. Litigation in both matters in the United States and Canada, respectively, were stayed pending the results of that appeal. Polycom also filed an IPR of the second patent and the U.S." Patent Trial and Appeal Board (“PTAB”) denied institution of the IPR petition. FullView had also initiated arbitration proceedings under a terminated license agreement with Polycom alleging that Polycom had failed to pay certain royalties due under that agreement. The arbitration panel awarded an immaterial amount to FullView. FullView filed a First and Second Amended Complaint and Polycom filed a motion to dismiss.The Court granted Polycom's partial motion to dismiss without prejudice and invalidated one of the patents in suit. Litigation on the remaining patent is ongoing.

On June 21, 2018, directPacket Research Inc. filed a complaint alleging patent infringement by Polycom in the United States District Court for the Eastern District of ~~Delaware (“Court”), alleging violations~~Virginia, Norfolk Division. The Court granted Polycom’s Motion to Transfer Venue to the Northern District of California. Polycom filed petitions for Inter Partes Review of the ~~Sherman Act,~~asserted patents which were granted by the ~~Clayton Act,~~PTAB. The District Court matter is stayed pending resolution of the IPRs. Oral argument was heard on the IPRs on October 20, 2020.On January 11, 2021, the PTAB issued final written decisions invalidating two of the asserted patents. The remaining claims of the third patent were unasserted against the Company.

On November 15, 2019, Felice Bassuk, individually and ~~Delaware common law. In~~on behalf of others similarly situated, filed a complaint against Plantronics, its CEO Joseph Burton, its CFO Charles Boynton and its former CFO Pamela Strayer alleging various securities law violations. Plaintiffs filed the amended complaint ~~GN specifically alleged four causes~~on June 5, 2020 and the Company’s Motion to Dismiss the Amended Complaint was filed on August 7, 2020. Plaintiffs filed their Opposition on October 2, 2020 and Plantronics replied on November 16, 2020.The hearing on the Motion to Dismiss scheduled to occur on January 13, 2021 was vacated and the parties are awaiting the judge’s ruling.

On December 17, 2019, Cisco Systems, Inc. filed a First Amended Complaint for Trade Secret Misappropriation against Plantronics, Inc. and certain individuals which amends a previously filed complaint against certain other individuals. The Company disputes the allegations. The Company filed a Motion to Dismiss. The Court granted the Motion to Dismiss with leave to amend as to Defendants He, Chung and Williams, granted the Motion to Compel Arbitration for Defendant Williams and granted in part and denied in part the Motion to Dismiss by Defendants Puorro and Poly. Cisco filed an Amended Complaint and the Defendants have moved to dismiss or strike portions of ~~action: monopolization, attempted monopolization, concerted action~~the Amended Complaint.The Court granted in ~~restraint of trade,~~part and ~~tortious interference with business relations. GN claimed that~~denied in part the Motion to Dismiss.On September 10, 2020, the Company ~~dominates~~filed a Motion for Protective Order and a Motion to Strike and Challenge the ~~market for headsets sold into contact centers~~Sufficiency of Cisco’s Trade Secret Disclosure. On December 21, 2020, the Court granted in ~~the U.S.~~part and that a critical channel for sales of headsets to contact centers is through a limited network of specialized independent distributors (“SIDs”). GN asserted that the Company attracts SIDs through exclusive distributor agreements and alleged that the use of these agreements is illegal. GN sought injunctive relief, total damagesdenied in ~~an unspecified amount, plus attorneys’ fees and costs, as well as unspecified legal and equitable relief.~~

~~The case was tried to a jury in October, 2017, resulting in a verdict in favor of the Company. GN~~part such Motions.On December 30, 2020, Cisco filed a motion for ~~new trial~~leave to file a Motion for Reconsideration. On January 11, 2021 the Company filed its opposition. Discovery continues. The Court issued its Case Management and Pretrial order setting a settlement conference which is scheduled currently for April 1, 2021.

On July 22, 2020, Koss Corporation sued Plantronics and Polycom in ~~November, 2017, and that motion was denied by~~ the ~~Court in January, 2018.~~Western District of Texas, Waco division alleging patent infringement with respect to four Koss patents. The Company answered the Complaint on October 1, 2020 disputing the claims.On December 18, 2020, the Company filed a ~~motion for attorneys’ fees~~Motion to Transfer. Discovery is in November, 2017 and that motion was denied by the Court in January, 2018. The Company filed a motion for certain recoverable costs, and the parties stipulated to an immaterial amount, which GN will pay the Company. If the jury verdict were to be overturned on appeal, the Company would have to repay that amount to GN. GN has not indicated whether it plans to file an appeal of the jury’s verdict.process.

In a letter dated May 1, 2017, the Company received a Notice of Proposed Debarment from the General Services Administration ("GSA") informing the Company that the GSA has proposed that the Company be debarred from participation in Federal procurement and non-procurement programs based on the above spoliation order issued in the GN litigation matter. The Company submitted a response to the GSA demonstrating that it is a responsible contractor and that a suspension or debarment is neither necessary to protect the government nor warranted. The GSA found “no cause” for debarment of Plantronics and terminated the proceeding against the Company in August 2017.

In addition to the specific ~~matter~~matters discussed above, the Company is involved in various legal proceedings and investigations arising in the normal course of conducting business. ~~For such legal proceedings, where~~Where applicable, in relation to the on-going matters described above, the Company has accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not

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material to the Company's financial condition, results of operations, or cash flows. ~~With respect to proceedings for which no accrual has been made, the~~The Company is not able to estimate an amount or range of any reasonably possible ~~additional losses~~loss, including in excess of any amount accrued, because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the variable treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings. However, based upon the Company's historical experience, the resolution of these proceedings is not expected to have a material effect on the Company's financial condition, results of operations or cash flows. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings.

7.8. DEBT

The estimated fair value and carrying value of the Company's outstanding debt as of December 26, 2020 and March 28, 2020 were as follows:


	December 26, 2020				March 28, 2020
(in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
5.50% Senior Notes	$	482,578	$	477,320	$	359,140	$	495,409
Term loan facility	$	1,093,784	$	1,099,678	$	852,942	$	1,126,285

As of December 26, 2020, and March 28, 2020, the net unamortized discount, premium and debt issuance costs on the Company's outstanding debt were $20.5 million and $25.1 million, respectively.

5.50% Senior Notes

In May 2015, the Company issued $500.0 million aggregate principal amount of 5.50% senior notes (the “5.50% Senior Notes”). The 5.50% Senior Notes mature on May 31, 2023, and bear interest at a rate of 5.50% per annum, payable semi-annually on May 15 and November 15, commencing on November 15, 2015. The Company received net proceeds of $488.4 million from the issuance of the 5.50% Senior Notes, net of issuance costs of $11.6 million which are being amortized to interest expense over the term of the 5.50% Senior Notes using the effective interest method. A portion of the proceeds was used to repay all then-outstanding amounts under ~~our~~the Company's revolving line of credit agreement with Wells Fargo Bank and the remaining proceeds were used primarily for share repurchases.

The fair value of the 5.50% Senior Notes was determined based on inputs that were observable in the market, including the trading price of the 5.50% Senior Notes when available (Level 2). ~~The estimated fair value and carrying value of the 5.50% Senior Notes were as follows:~~

March 31, 2017 December 31, 2017
(in thousands) Fair Value Carrying Value Fair Value Carrying Value
5.50% Senior Notes $ 505,150
$ 491,059
$ 520,425
$ 492,146

The Company may redeem all or a part of the 5.50% Senior Notes, upon not less than 30 or more than a ~~60 day~~60-day notice; however, the applicable redemption price ~~will be determined as follows:~~



	~~Redemption Period Requiring Payment of:~~		~~Redemption Up To 35% Using Cash Proceeds From An Equity Offering~~⁽³⁾:
	~~Make-Whole~~⁽¹⁾	~~Premium~~⁽²⁾	~~Date~~	~~Specified Price~~
~~5.50% Senior Notes~~	~~Prior to May 15, 2018~~	~~On or after May 15, 2018~~	~~Prior to May 15, 2018~~	~~105.500%~~

⁽¹⁾Ifis the Company redeems the notes prior to the applicable date, the redemption price is principal plus a make-whole premium equal to the present value of the remaining scheduled interest payments as described in the applicable indenture, together with accrued and unpaid interest.

⁽²⁾~~If the Company redeems the notes on or after the applicable date, the price is~~ principal plus a premium which declines over time as specified in the applicable indenture, together with accrued and unpaid interest.

⁽³⁾If the Company redeems the notes prior to the applicable date with net cash proceeds of one or more equity offerings, the price is equal to the amount specified above, together with accrued and unpaid interest, subject to a maximum redemption of 35% of the aggregate principal amount of the respective note being redeemed.

In addition, upon the occurrence of certain change of control triggering events, the Company may be required to repurchase the 5.50% Senior Notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The 5.50% Senior Notes contain restrictive covenants that, among other things, limit the Company's ability to create certain liens and enter into sale and ~~leaseback~~lease-back transactions; create, assume, incur, or guarantee additional indebtedness of its subsidiaries without such subsidiary guaranteeing the 5.50% Senior Notes on an unsecured unsubordinated basis; and consolidate or merge with, or convey, transfer or lease all or substantially all of the assets of the Company and its subsidiaries, to another person. ~~As of~~During the three months ended December ~~31, 2017,~~26, 2020, the Company ~~was~~repurchased $12.0 million aggregate principal amount of the 5.50% Senior Notes. The Company recorded an immaterial gain on the repurchase, which is included in ~~compliance~~interest expense of the Company's condensed consolidated statements of operations.

Credit Facility Agreement

In connection with ~~all covenants.~~

~~Revolving Credit Agreement~~

~~On May 9, 2011,~~the Polycom Acquisition completed on July 2, 2018, the Company entered into a ~~credit agreement~~Credit Agreement with Wells Fargo Bank, National Association, ("as administrative agent, and the ~~Bank"~~lenders party thereto (the “Credit Agreement”),. The Credit Agreement replaced the Company’s prior revolving credit facility in its entirety. The Credit Agreement provides for (i) a revolving credit facility with an initial maximum aggregate amount of availability of $100 million that matures in July 2023 and (ii) a $1.275 billion term loan facility priced at LIBOR plus 250bps due in quarterly principal installments commencing on the last business day of March, June, September and December beginning with the first full fiscal quarter ending after the Closing Date for the aggregate principal amount funded on the Closing Date multiplied by 0.25% (subject to prepayments outlined in the Credit Agreement) and all remaining outstanding principal due at maturity in July 2025. The Company borrowed the full

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amount available under the term loan facility of $1.245 billion, net of approximately $30 million of discounts and issuance costs which ~~was most recently amended on April 28, 2017 (as amended, the "Amended Credit Agreement")~~are being amortized to ~~extend~~interest expense over the term of the agreement using the straight-line method which approximates the effective interest method for this debt. The proceeds from the initial borrowing under the Credit Agreement were used to finance the Acquisition, to refinance certain debt of Polycom, and to pay related fees, commissions and transaction costs. The Company has additional borrowing capacity under the Credit Agreement through the revolving credit facility which could be used to provide ongoing working capital and capital for other general corporate purposes of the Company and its subsidiaries. The Company’s obligations under the Credit Agreement are currently guaranteed by ~~one year~~Polycom and will from time to ~~May 9,~~time be guaranteed by, subject to certain exceptions, any domestic subsidiaries that may become material in the future. Subject to certain exceptions, the Credit Agreement is secured by first-priority perfected liens and security interests in substantially all of the personal property of the Company and each subsidiary guarantor and will from time to time also be secured by certain material real property that the Company or any subsidiary guarantor may acquire. Borrowings under the Credit Agreement bear interest due on a quarterly basis at a variable rate equal to (i) LIBOR plus a specified margin, or (ii) the base rate (which is the highest of (a) the prime rate publicly announced from time to time by Wells Fargo Bank, National Association, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus a specified margin. The Company must also pay (i) an unused commitment fee ranging from 0.200% to 0.300% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement, and (ii) a per annum fee equal to (a) for each performance standby letter of credit outstanding under the Credit Agreement with respect to non-financial contractual obligations, 50% of the applicable margin over LIBOR under the revolving credit facility in effect from time to time multiplied by the daily amount available to be drawn under such letter of credit, and (b) for each other letter of credit outstanding under the Credit Agreement, the applicable margin over LIBOR under the revolving credit facility in effect from time to time multiplied by the daily amount available to be drawn under such letter of credit.

On February 20, 2020, the Company entered into an Amendment No. 2 to Credit Agreement (the “Amendment”) by and among the Company, the financial institutions party thereto as lenders and Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Agent”). The Amendment amended the Credit Agreement, as previously amended to (i) increase the maximum Secured Net Leverage Ratio (as defined in the Credit Agreement) permitted under the Credit Agreement to 3.75 to 1.00 through December 26, 2020 and 3.00 to ~~amend~~1.00 thereafter and (ii) decrease the minimum Interest Coverage Ratio (as defined in the Credit Agreement) required under the Credit Agreement to 2.25 to 1.00 through December 26, 2020 and 2.75 to 1.00 thereafter.

Additionally, the Amendment modified the calculation of the Secured Net Leverage Ratio and the Interest Coverage Ratio solely for purposes of compliance with Sections 7.11(a) and 7.11(b) of the Credit Agreement to (i) calculate the Secured Net Leverage Ratio net of the aggregate amount of unrestricted cash and Cash Equivalents (as defined in the Credit Agreement) on the balance sheet of the Company and its Restricted Subsidiaries (as defined in the Credit Agreement) as of the date of calculation up to an amount equal to $150,000,000 and (ii) solely for purposes of any fiscal quarter ending from December 29, 2019 through December 26, 2020, increase the cap on Expected Cost Savings (as defined in the Credit Agreement) in determining Consolidated EBITDA (as defined in the Credit Agreement) to the greater of (A) 20% of Consolidated EBITDA for such Measurement Period (as defined in the Credit Agreement) (calculated before giving effect to any such Expected Cost Savings to be added back pursuant to clause (a)(ix) of the definition of Consolidated EBITDA) and (B)(x) for the period from December 29, 2019 through March 28, 2020, $121,000,000, (y) for the period from March 29, 2020 through June 27, 2020, $107,000,000 and (z) for the period from June 28, 2020 through December 26, 2020, $88,000,000.

The financial covenants under the Credit Agreement described above are for the benefit of the revolving credit lenders only and do not apply to any other debt of the Company. The Credit Agreement also contains various other restrictions and covenants, some of which have become more stringent over time, including restrictions on our, and certain of our subsidiaries, ability to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions, make investments and pay dividends and other distributions. The Company has the unilateral ability to terminate the revolving line of credit such that the financial covenants ~~which~~described above are ~~defined below.~~

no longer applicable. The ~~Amended~~ Credit Agreement ~~provides for~~also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the lenders may declare any outstanding obligations under the Credit Agreement to be immediately due and payable; provided, however, that the occurrence of an event of default as a ~~$100.0 million unsecured~~result of a breach of a financial covenant under the Credit Agreement does not constitute a default or event of default with respect to any term facility under the Credit Agreement unless and until the required revolving lenders shall have terminated their revolving commitments and declared all amounts outstanding under the revolving credit ~~facility. Revolving loans~~facility to be due and payable. In addition, if the Company, any subsidiary guarantor or, with certain exceptions, any other subsidiary becomes the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable. Loans outstanding under the Credit Agreement will bear interest at ~~the Company’s election, at (i) the Bank’s announced prime~~a rate ~~less 1.20%~~of 2.00% per annum in excess of the otherwise applicable rate (i) while a payment or bankruptcy event of default exists or (ii) ~~a daily one-month LIBOR rate plus 1.40% per annum. Interest is payable quarterly~~upon the lenders’ request, during the continuance of any other event of default. As of December 26, 2020, the Company was in ~~arrears on~~compliance with the ~~first day~~financial covenants.

Table of each of April, July, October and January. Principal, together with all accrued and unpaid interest, on the revolving loans is due and payable on May 9, 2020. The Company is also obligated to pay a commitment fee of 0.37% per annum on the average daily unused amount of the revolving line of credit, which fee shall be payable quarterly in arrears on the first day of each of April, July, October and January.Contents

The Company may prepay the loans and terminate the commitments under the Credit Facility Agreement at any time without ~~premium or penalty,~~penalty. Additionally, the Company is subject to mandatory debt repayments five business days after the ~~reimbursement~~filing of ~~certain costs.~~its financial statements for any annual period in which the Company generates excess cash as defined by the Credit Agreement. In accordance with the terms of the Credit Agreement, the Company did not generate excess cash during Fiscal Year 2020 and therefore is not required to make any debt repayments in Fiscal Year 2021. During the three months ended December ~~31, 2017~~26, 2020, the Company ~~borrowed~~did not prepay any aggregate principal amount of the term loan facility and ~~repaid $8 million from our line~~did not incur any prepayment penalties. As of December 26, 2020, the Company has 5 outstanding letters of credit ~~and as of March 31, 2017 and December 31, 2017, the Company had no outstanding borrowings~~ on the ~~line~~revolving credit facility for a total of ~~credit.~~

$1.4 million. The ~~Amended Credit Agreement contains customary affirmative and negative covenants, including, among other things, covenants limiting the ability~~fair value of the Company to incur debt, make capital expenditures, grant liens, merge or consolidate, and make investments. The Amended Credit Agreement also requires the Company to comply with certain financial covenants, including (i) a maximum ratio of funded debt to EBITDA of 3.25:1 (previously 3:1) and (ii) a minimum EBITDA coverage ratio, in each case, tested as of each fiscal quarter andterm loan facility was determined based on a rolling four-quarter basis. In addition, the Company and its subsidiaries are required to maintain unrestricted cash, cash equivalents and marketable securities plus availability under the Amended Credit Agreement at the end of each fiscal quarter of at least $300.0 million. The Amended Credit Agreement contains customary events of defaultinputs that include, among other things, payment defaults, covenant defaults, cross-defaults with certain other indebtedness, bankruptcy and insolvency defaults, and judgment defaults. The occurrence of an event of default could resultwere observable in the ~~acceleration of the obligations under the Amended Credit Agreement. As of March 31, 2017 and December 31, 2017, the Company was in compliance with all covenants.~~market (Level 2).

8.9. RESTRUCTURING AND OTHER RELATED CHARGES ~~(CREDITS)~~

Summary of Restructuring Plans

Fiscal Year 2021 restructuring plan

During the ~~first~~ nine months ended December 26, 2020, the Company committed to additional actions to reduce expenses and right size its overall cost structure to better align with projected revenue levels as well as reorganize its executive management to align to its new Chief Executive Officer’s management structure. The costs incurred to date under this plan include severance benefits related to headcount reductions in the Company's global workforce and facility related charges due to closure or consolidation of leased offices.

Fiscal Year 2018 and as part of its ongoing effort to reduce costs, improve profitability, and focus on its key strategic initiatives, the Company executed an asset sale agreement to dispose of substantially all assets of its Clarity division, primarily inventories and tooling fixed assets, for an immaterial sales price. The buyer in this arrangement was a former employee of the Company, who acted as Clarity's President but who was not an executive officer or director of the Company. As part of the buyer's separation from Plantronics, the Company accelerated vesting on his outstanding restricted stock, resulting in an immaterial stock-compensation modification charge.2020 restructuring plans

In connection with the sale, the Company is leasing the facility it owns in Chattanooga, Tennessee, to the buyer for a period of twelve months. The Company also entered into a transition services agreement with the buyer to provide customer support services on a cost-recovery basis, which are not expected to be material, for a period of one year. The Company also recorded immaterial impairment charges on assets previously used in Clarity operations that have no further value to the Company.

In addition to the sale of the Clarity division and the related restructuring actions, the Company reduced headcount in certain divisions and terminated a lease in the Netherlands before the end of its contractual term, resulting in a charge equal to the present value of the remaining future minimum lease payments. In connection with this exit, the Company wrote off certain fixed assets that will no longer be used. Finally, the Company reorganized its Brazilian operations and as a result, wrote off an unrecoverable indirect tax asset.

~~As of December 31, 2017, the remaining obligation related to severance amounts due is immaterial and will be settled within 12 months.~~

During the ~~quarter ended December 31, 2017, we recorded an immaterial adjustment~~Fiscal Year 2020, the Company committed to additional actions to rationalize post-Acquisition operations and costs to align the Company's cost structure to current revenue expectations. The costs incurred to date under these plans include severance benefits related to headcount reductions in the Company's global workforce, facility related charges due to consolidation of the Company's leased offices, asset impairments associated with consumer product portfolio optimization efforts, and other costs associated with legal entity rationalization.

Fiscal Year 2019 restructuring plans

During the Fiscal Year 2019, the Company initiated post-Acquisition restructuring plans to realign the Company's cost structure, including streamlining the global workforce, consolidation of certain distribution centers in North America, and reduction of redundant legal entities, in order to take advantage of operational efficiencies following the Acquisition. The costs incurred to date under these plans have primarily comprised of severance benefits from reduction in force actions, facilities related actions initiated by management, and legal entity rationalization.

The following table summarizes the restructuring and other related charges ~~(credits) resulting from a change~~recognized in ~~estimate from amounts previously recorded.~~the Company's condensed consolidated statements of operations:


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Severance	$	3,969	$	11,708	$	27,161	$	25,480
Facility	1,658		2,147		3,300		2,147
Other (1)	1,107		932		3,416		7,798
Non-cash charges (2)	7,243		6,937		15,600		11,671
Total restructuring and other related charges	$	13,977	$	21,724	$	49,477	$	47,096

(1) Other costs primarily represent associated legal and advisory services.

(2) Non-cash charges primarily represent asset impairments due to the closure or consolidation of facilities.

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The ~~associated~~Company's restructuring liabilities as of December 26, 2020 is as follows (amounts in thousands):


	As of March 28, 2020		Accruals (1)		Cash Payments		As of December 26, 2020
FY 2021 Plans
Severance	$	0	$	27,838	$	(18,170)	$	9,668
Facility	0		1,055		(59)		996
Other	0		3,415		(2,177)		1,238
Total FY2021 Plans	$	0	$	32,308	$	(20,406)	$	11,902
FY 2020 Plans
Severance	$	7,475	$	(1,216)	$	(4,906)	$	1,353
Facility	2,501		2,245		(1,388)		3,358
Other	1,621		0		(1,621)		0
Total FY2020 Plans	$	11,597	$	1,029	$	(7,915)	$	4,711
FY 2019 Plans
Severance	$	147	$	539	$	(356)	$	330
Facility	0		0		0		0
Other	117		0		(117)		0
Total FY2019 Plans	$	264	$	539	$	(473)	$	330
Severance	$	7,622	$	27,161	$	(23,432)	$	11,351
Facility	2,501		3,300		(1,447)		4,354
Other	1,738		3,415		(3,915)		1,238
Grand Total	$	11,861	$	33,876	$	(28,794)	$	16,943

(1) Excludes non-cash charges of $15.6 million classified within Restructuring and other related charges on the Company's condensed consolidated statements of operations for the nine months ended December 31, 2017 are recorded in restructuring and other related charges (credits), cost of revenues, and selling, general, and administrative expense in the condensed consolidated statements of operations, as follows:26, 2020.

Nine months ended December 31, 2017
(in millions) Total Charges Restructuring and Other Related Charges (Credits) Cost of Revenues Selling, General, and Administrative
Severance benefits from reduction-in-force $ 1.3
$ 1.3
$ —
$ —
Lease exit charge and asset impairments in Netherlands 0.7
0.7
—
—
Write-off of unrecoverable indirect tax asset in Brazil 0.7
—
0.7
—
Asset impairments related to previous Clarity operations 0.4
0.4
—
—
Loss on Clarity asset sale 0.9
—
0.9
—
Accelerated vesting of restricted stock 0.2
—
—
0.2
Totals $ 4.2
$ 2.4
$ 1.6
$ 0.2

9.10. STOCK-BASED COMPENSATION

Stock-based Compensation

The Company recognizes the grant-date fair value of stock-based compensation as compensation expense using the straight-line attribution approach over the service period for which the stock-based compensation is expected to vest. The following table summarizes the amount of stock-based compensation included in the condensed consolidated statements of operations:


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Cost of revenues	$	799	$	1,019	$	2,374	$	2,994

Research, development, and engineering	3,441		4,584		10,740		12,516
Selling, general, and administrative	7,246		8,299		17,995		25,989
Stock-based compensation included in operating expenses	10,687		12,883		28,735		38,505
Total stock-based compensation	11,486		13,902		31,109		41,499
Income tax expense (benefit)	1,373		(2,798)		(6,798)		(5,941)
Total stock-based compensation, net of tax	$	12,859	$	11,104	$	24,311	$	35,558

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Cost of revenues $ 794
$ 917
$ 2,414
$ 2,709

Research, development, and engineering 1,771
2,049
6,663
6,158
Selling, general, and administrative 6,124
5,063
15,928
17,180
Stock-based compensation included in operating expenses 7,895
7,112
22,591
23,338
Total stock-based compensation 8,689
8,029
25,005
26,047
Income tax expense (benefit) (2,986 ) 2,039
(8,635 ) (5,650 )
Total stock-based compensation, net of tax $ 5,703
$ 10,068
$ 16,370
$ 20,397

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~~10.~~11. COMMON STOCK REPURCHASES

From time to time, the Company's Board of Directors (the "Board") has authorized programs under which the Company may repurchase shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions. Repurchased shares are held as treasury stock until they are retired or re-issued. ~~Repurchases by~~On November 28, 2018, the ~~Company pursuant~~Board approved a 1 million share repurchase program expanding its capacity to ~~Board-authorized programs during the nine months ended December 31, 2016 and 2017 are discussed below.~~repurchase shares to approximately 1.7 million shares. As of December ~~31, 2017~~,26, 2020, there remained ~~730,932~~1,369,014 shares authorized for repurchase under the repurchase program approved by the ~~Board on July 27, 2017. There were no remaining shares authorized under previously approved programs.~~Board.

InFor the ~~nine months~~periods ended December ~~31, 2016~~26, 2020 and ~~2017,~~December 28, 2019, the Company ~~repurchased 764,176~~did not repurchase any shares ~~and 1,138,903 shares, respectively,~~ of its common ~~stock in the open market for a~~stock.

The total ~~cost~~value of ~~$34.2 million and $52.9 million, respectively, and at an average price per share of $44.80 and $46.46, respectively. In addition, the Company~~shares withheld ~~shares valued at $9.4 million and $11.2 million in the nine months ended December 31, 2016 and 2017, respectively,~~ in satisfaction of employee tax ~~withholding~~ obligations ~~upon~~on the vesting of ~~restricted stock granted under~~equity awards for the ~~Company's stock plans.~~three months ended December 26, 2020 and December 28, 2019 were $0.1 million and $0.4 million, respectively. The amounts withheld were equivalent to the employees' minimum statutory tax withholding requirements and are reflected as a financing activity within the Company's condensed consolidated statements of cash flows. These share withholdings have the same effect as share repurchases by the Company as they reduce the number of shares that would have otherwise been issued in connection with the vesting of shares subject to the restricted stock grants.

~~11.~~12. ACCUMULATED OTHER COMPREHENSIVE ~~INCOME~~LOSS

The components of accumulated other comprehensive income ("AOCI"), net of immaterial tax effects, are as follows:


(in thousands)	December 26, 2020		March 28, 2020
Accumulated unrealized loss on cash flow hedges (1)	$	(13,328)	$	(18,197)
Accumulated foreign currency translation adjustments	4,207		4,615

Accumulated other comprehensive loss	$	(9,121)	$	(13,582)

(in thousands) March 31, 2017 December 31, 2017
Accumulated unrealized gain (loss) on cash flow hedges⁽¹⁾
$ 529
$ (2,200 )
Accumulated foreign currency translation adjustments 4,428
4,685
Accumulated unrealized gain (loss) on investments (263 ) (580 )
Accumulated other comprehensive income $ 4,694
$ 1,905

⁽¹⁾Refer to Note ~~12, Foreign Currency~~13, Derivatives, which discloses the nature of the Company's derivative assets and liabilities as of December 26, 2020and March ~~31, 2017and December 31, 2017.~~28, 2020.

~~12. FOREIGN CURRENCY~~13. DERIVATIVES

Foreign Currency Derivatives

The Company's foreign currency derivatives consist primarily of foreign currency forward exchange contracts and option ~~contracts, and cross-currency swaps.~~contracts. The Company does not purchase derivative financial instruments for speculative trading purposes. The derivatives expose the Company to credit risk to the extent the counterparties may be unable to meet the terms of the derivative instrument. The Company's maximum exposure to loss that it would incur due to credit risk if parties to derivative contracts failed completely to perform according to the terms of the contracts was equal to the carrying value of the Company's derivative assets as of December ~~31, 2017~~.26, 2020 and March 28, 2020. The Company seeks to mitigate such risk by limiting its counterparties to large financial institutions. In addition, the Company monitors the potential risk of loss with any one counterparty resulting from this type of credit risk on an ongoing basis.

The Company enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between the Company and the counterparty as a result of multiple, separate derivative transactions. As of December ~~31, 2017~~,26, 2020, the Company had International Swaps and Derivatives Association ~~(ISDA)~~("ISDA") agreements with ~~four~~ 4 applicable banks and financial institutions which contained netting provisions. ~~Plantronics~~The Company has elected to present the fair value of derivative assets and liabilities onwithin the Company's condensed consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period. Derivatives not subject to master netting agreements are not eligible for net presentation. As of December 26, 2020, and March ~~31, 2017 and December 31, 2017,~~28, 2020, no cash collateral had been received or pledged related to these derivative instruments.

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The gross fair value of the Company's outstanding derivative contracts at the end of each period was as follows:


(in thousands)	December 26, 2020		March 28, 2020
Derivative Assets(1)
Non-designated hedges	$	120	$	266
Cash flow hedges	381		3,283

Total derivative assets	$	501	$	3,549

Derivative Liabilities(2)
Non-designated hedges	$	2,147	$	668
Cash flow hedges	5,440		811
Interest rate swap	13,145		21,411
Accrued interest	869		631
Total derivative liabilities	$	21,601	$	23,521

(in thousands) March 31, 2017 December 31, 2017
Derivative Assets⁽¹⁾

Non-designated hedges $ 86
$ 19
Cash flow hedges 2,034
332
Total Derivative Assets $ 2,120
$ 351

Derivative Liabilities⁽²⁾

Non-designated hedges $ 286
$ 1,155
Cash flow hedges 1,109
3,345
Total Derivative Liabilities $ 1,395
$ 4,500

⁽¹⁾Short-term derivative assets are recorded in "other current assets" and long-term derivative assets are recorded in "deferred tax and other assets". As of December ~~31, 2017~~26, 2020, the portion of derivative assets classified as long-term was immaterial.

(2) Short-term derivative liabilities are recorded in "accrued liabilities" and long-term derivative liabilities are recorded in "other long-term liabilities". As of December ~~31, 2017~~26, 2020, the portion of derivative liabilities classified as long-term was ~~immaterial.~~$4.0 million.

Non-Designated Hedges

As of December ~~31, 2017,~~26, 2020, the Company had foreign currency forward contracts denominated in Euros ("EUR"), and British Pound Sterling ("GBP"~~), Australian Dollars ("AUD"), and Canadian Dollars ("CAD"~~). The Company does not elect to obtain hedge accounting for these forward contracts. These forward contracts hedge against a portion of the Company’s foreign currency-denominated cash balances, receivables, and payables. The following table summarizes the notional value of the Company’s outstanding foreign exchange currency contracts and approximate U.S. Dollar ("USD") equivalent at December ~~31, 2017~~:26, 2020:


(in thousands)	Local Currency		USD Equivalent		Position	Maturity
EUR	€	90,960	$	110,906	Sell EUR	1 month
GBP	£	11,700	$	15,799	Sell GBP	1 month

(in thousands) Local Currency USD Equivalent Position Maturity
EUR € 38,700
$ 46,560
Sell EUR 1 month
GBP £ 5,100
$ 6,899
Sell GBP 1 month
AUD A$ 14,200
$ 11,092
Sell AUD 1 month
CAD C$ 2,900
$ 2,315
Sell CAD 1 month

Effect of Non-Designated Derivative Contracts on the Condensed Consolidated Statements of Operations

The effect of non-designated derivative contracts recognized in other non-operating income and (expense), net in the condensed consolidated statements of operations was as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Gain (loss) on foreign exchange contracts	$	(4,440)	$	(2,508)	$	(7,173)	$	813

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Gain (loss) on foreign exchange contracts $ 3,801
$ 848
$ 5,551
$ 6,083

Cash Flow Hedges

Costless Collars

The Company hedges a portion of the forecasted EUR and GBP denominated revenues with costless collars. On a monthly basis, the Company enters into option contracts with a six to ~~eleven month~~eleven-month term. Collar contracts are scheduled to mature at the beginning of each fiscal quarter, at which time the instruments convert to forward contracts. The Company also enters into cash flow forwards ~~with~~with a ~~three month~~three-month term. Once the hedged revenues are recognized, the forward contracts become non-designated hedges to protect the resulting foreign monetary asset position for the Company.

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The notional value of the Company's outstanding EUR and GBP option and forward contracts at the end of each period was as follows:

(in millions)

December 26, 2020

March ~~31, 2017~~

~~December 31, 2017~~28, 2020

~~(in millions)~~

EUR

GBP

EUR

GBP

Option contracts

€~~73.5~~68.0

£~~23.9~~13.0

€~~75.8~~67.0

£~~22.9~~18.4

Forward contracts

€~~11.2~~62.3

£~~3.3~~12.4

€~~13.0~~50.2

£~~4.1~~18.5

The Company will reclassify all amounts accumulated in other comprehensive income into earnings within the next twelve months.

Cross-currency Swaps

The Company hedges a portion of the forecasted Mexican Peso (“MXN”) denominated expenditures with a cross-currency swap. As of December 26, 2020, and March ~~31, 2017 and December 31, 2017,~~28, 2020, the Company had foreign currency swap contracts of approximately MXN ~~287.2~~389.0 million and MXN ~~76.3~~0.0 million, respectively.

The following table summarizes the notional value of the ~~Company’s~~Company's outstanding MXN ~~cross-currency~~currency swaps and approximate USD Equivalent at December 26, 2020:

Local Currency

USD Equivalent

Position

Maturity

(in thousands)

MXN

389,008

19,009

Buy MXN

Monthly over twelve months

Interest Rate Swap

On July 30, 2018, the Company entered into a 4-year amortizing interest rate swap agreement with Bank of America, N.A. The swap has an initial notional amount of $831 million and matures on July 31, ~~2017~~:2022. The swap involves the receipt of floating-rate interest payments for fixed interest rate payments at a rate of 2.78% over the life of the agreement. The Company has designated this interest rate swap as a cash flow hedge. The purpose of this swap is to hedge against changes in cash flows (interest payments) attributable to fluctuations in the Company's variable rate debt. The derivative is valued based on prevailing LIBOR rate curves on the date of measurement. The Company also evaluates counterparty credit risk when it calculates the fair value of the swap. The effective portion of changes in the fair value of the derivative is recorded to other comprehensive income (loss) on the accompanying balance sheets and reclassified into interest expense over the life of the underlying debt as interest on the Company's floating rate debt is accrued. The Company reviews the effectiveness of this instrument on a quarterly basis, recognize current period hedge ineffectiveness immediately in earnings and will discontinue hedge accounting if the Company no longer considers hedging to be highly effective. This hedge was fully effective at inception on July 30, 2018 and as of the nine months ended December 26, 2020. During the nine months ended December 26, 2020, the Company reclassified into interest expense $10.3 million and had a $13.1 million unrealized loss on its interest rate swap derivative designated as a cash flow hedge.

(in thousands) Local Currency USD Equivalent Position Maturity
MXN $ 76,340
$ 3,935
Buy MXN Monthly over 6 months

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Effect of Designated Derivative Contracts on AOCI and Condensed Consolidated Statements of Operations

The following table presents the pre-tax effects of derivative instruments designated as cash flow hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017:~~December 28, 2019:


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Gain (loss) included in AOCI as of beginning of period	$	(16,747)	$	(13,311)	$	(20,156)	$	(7,480)

Amount of gain (loss) recognized in other comprehensive income (“OCI”) (effective portion)	(3,754)		(1,420)		(8,339)		(5,755)

Amount of (gain) loss reclassified from OCI into net revenues (effective portion)	1,054		(225)		1,797		(3,152)
Amount of (gain) loss reclassified from OCI into cost of revenues (effective portion)	0		(46)		0		(212)
Amount of (gain) loss reclassified from OCI into interest expense (effective portion)	3,039		1,565		10,290		3,162
Total amount of (gain) loss reclassified from AOCI to income (loss) (effective portion)	4,093		1,294		12,087		(202)



Gain (loss) included in AOCI as of end of period	$	(16,408)	$	(13,437)	$	(16,408)	$	(13,437)

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Gain (loss) included in AOCI as of beginning of period $ (471 ) $ (3,089 ) $ (1,106 ) $ 541

Amount of gain (loss) recognized in other comprehensive income (“OCI”)
(effective portion)
2,090
(446 ) 2,394
(5,093 )

Amount of gain (loss) reclassified from OCI into net revenues (effective portion) 2,178
1,357
3,163
2,506
Amount of gain (loss) reclassified from OCI into cost of revenues (effective portion) (756 ) (61 ) (2,072 ) (193 )
Total amount of gain (loss) reclassified from AOCI to income (loss) (effective portion) 1,422
1,296
1,091
2,313

Gain (loss) included in AOCI as of end of period $ 197
$ (2,239 ) $ 197
$ (2,239 )

As a result of adopting ASU 2017-12, beginning in the first quarter of fiscal year 2020, the excluded portion of such amounts is included in the same line item in which the underlying transactions affect earnings and the ineffective portion of the realized and unrealized gains or losses on derivatives is included as a component of accumulated other comprehensive income. During the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019, the Company ~~recognized~~did not have an ~~immaterial gain and immaterial loss on the~~ ineffective portion of its cash flow ~~hedges, respectively, which is reported in other non-operating income and (expense), net in the condensed consolidated statements of operations.~~hedges.

~~13.~~14. INCOME TAXES

The Company and its subsidiaries are subject to taxation in the U.S. and in various foreign and state jurisdictions. The Company's tax benefit is determined using an estimate of its annual effective tax rate and adjusted for discrete items that are taken into account in the relevant period. The effective tax rates for the three months ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019 were ~~11.0%~~(53.9)% and ~~255.1%~~20.1%, respectively. The effective tax rates for the nine months ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019 were ~~18.4%~~9.6% and ~~114.6%,~~17.4%. respectively.

~~On December 22, 2017, the Tax Cuts and Jobs Act (H.R. 1) (the “Act”) was signed into law~~The change in the United States. The Act includes several changes to existing tax law, including, among other things, a permanent reduction in the corporate income tax rate from 35% to 21% and the move from a worldwide to a territorial tax system.

under the Act. The Company recorded a $69.3 million toll charge as part of income tax expense in the quarter ended December 31, 2017, representing a provisional estimate based on a 15.5% tax applied to foreign unremitted cash and cash equivalents and an 8% tax applied to permanently reinvested foreign assets. The provisional toll charge increased our effective tax rate ~~by 217.2% and 94.1%~~ for the three and nine months ended December 30, 2017, respectively. As part of the Act, the Company also completed its remeasurement of deferred tax assets as of December 31, 2017 to the new future federal tax rate of 21%, thereby reducing the Company’s deferred tax assets by $2.1 million. The rate change resulted in an overall increase to the Company’s effective tax rate by 6.6% and 2.9% for the three and nine months ended December 31, 2017, respectively. In addition, prior to its third quarter of Fiscal Year 2018, the Company did not recognize a deferred tax liability related to unremitted foreign earnings because its plans did not require the Company to repatriate earnings from foreign operations to fund U.S. operations. The Company expects to fund payment of the toll charge by repatriating a portion of its foreign earnings and as such, has recorded a deferred tax liability of $5.0 million related to state income taxes and foreign withholding taxes that will become due as the Company repatriates foreign earnings. This increased the Company’s effective tax rate by 15.6% and 6.8% for the three and nine months ended December 31, 2017, respectively. Finally, the Company files its federal tax return on a fiscal year-end and is therefore required to pro-rate the new and old tax rates during Fiscal Year 2018. The blended, annualized tax rate applied to Fiscal Year 2018 income is 31.56%. This reduction in the federal tax rate reduced the Company’s global tax rate by 2.3% and 1.0% for the three and nine months ended December 31, 2017, respectively.

The provisional estimate for the toll charge will be finalized when the Company completes its substantive review of unremitted foreign earnings through examination of statutory filings and tax returns of the Company's foreign subsidiaries and fiscal branches that span a 30-year period. The Company must also analyze the impact of foreign exchange rates and inflation on the historical information to support foreign tax credits available to offset the toll charge. In addition, the Company's estimate of the toll charge obligation may change due to legislative technical corrections, the IRS' promulgation of regulations to interpret the Act, and changes in accounting standards for income taxes or related interpretations in response to the Act. This review and finalization of the toll charge provisional estimate will be completed within a twelve month measurement period from the date of enactment.

The Company recorded a correction to the geographic mix of income during the three months ended June 30, 2017 related to Fiscal Year 2017, which reduced income in a high tax jurisdiction and increased income in a low tax jurisdiction. This correction resulted in a reduction to the Company’s effective tax rate by 3.5 percentage points for the nine months ended December 31, 2017 as compared26, 2020 relative to the prior year ~~period~~is primarily due to recently enacted statutory tax rate increase in Netherlands, resulting in a benefit from a revaluation of net deferred tax assets from internal intangible property restructuring between our wholly-owned subsidiaries.

As of December 26, 2020, the Company had approximately $97.3 million in non-US net deferred tax assets ("DTAs") after valuation allowance, and ~~had no impact~~continued to maintain a full valuation allowance against its U.S. federal and state deferred tax assets. A significant portion of the Company's DTAs relate to internal intangible property restructuring between wholly-owned subsidiaries. At this time, based on evidence currently available, the ~~three months ended December 31, 2017. For additional details regarding this correction refer~~Company considers it more likely than not that it will have sufficient taxable income in the future that will allow the Company to ~~Note 1,~~ ~~Basis of Presentation~~.realize the DTAs; however, failure to generate sufficient taxable income could result in some or all DTAs not being utilized in the future. If the Company is unable to generate sufficient future taxable income, a substantial valuation allowance to reduce the Company's DTAs may be required.

The Company ~~adopted new stock-based compensation accounting guidance effective~~is subject to the ~~beginning~~examination of ~~Fiscal Year 2018. Excess~~its income tax ~~benefits associated with employee equity plans were previously recorded~~returns by the Internal Revenue Service and other tax authorities. Significant judgment is required in ~~additional paid-in capital~~evaluating our uncertain tax positions and ~~the adoption of this guidance had an immaterial impact on~~determining the Company's ~~effective tax rate~~provision for income taxes. As of December 26, 2020, the ~~three months ended December 31, 2017, but resulted in~~Company had a reduction to the Company's effective tax rate by 2.6 percentage points for the nine months ended December 31, 2017. The amount of excess tax benefits or deficiencies will fluctuate from period-to-period based on the price of the Company’s stock, the volume of share-based instruments settled or vested, and the value assigned to employee equity awards under U.S. GAAP.

~~Included in long-term income taxes payable in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2017 were~~total gross unrecognized tax benefits of ~~$12.9~~$29.1 million compared with $36.3 million as of December 28, 2019. The reduction in gross unrecognized tax benefits is primarily attributed to examination closure and ~~$12.3 million, respectively, which~~settlement by the IRS relating to our 2017 Fiscal Year income tax return related to reversal of the United States Tax Court’s holding in Altera Corp. v. Commissioner that upheld the portion of the Treasury regulations issued under IRC Section 482 requiring related-party participants in a cost sharing arrangement to share stock-based compensation costs. If recognized, the gross unrecognized tax benefits would ~~favorably impact~~reduce the effective tax rate in future periods if recognized. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense in the condensed consolidated statements of operations. The accrued interest related to unrecognized tax benefits was $1.7 million and $1.4 million as of March 31, 2017 and December 31, 2017, respectively. No penalties have been accrued.

The Company and its subsidiaries are subject to taxation in the U.S. federal and various foreign and state jurisdictions. The Company’s Fiscal Year 2016 federal income tax return is currently under examination by the Internal Revenue Service. Foreign income tax matters for material tax jurisdictions have been concluded for tax years prior to Fiscal Year 2012.

The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations; however, the outcome of such examinations cannot be predicted with certainty. If any issues addressed in the tax examinations are resolved in a manner inconsistent with the Company's expectations, the Company could be required to adjust its provision for income tax in the period ~~such resolution occurs. The timing~~ of ~~any resolution and/or closure~~recognition.

Table of ~~tax examinations is not certain.~~Contents

~~14.~~15. COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per share is calculated by dividing net income (loss) associated with common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options and vesting of restricted stock, if the effect is dilutive, in accordance with the treasury stock method or two-class method (whichever is more dilutive). ~~Refer to Note 1,~~ ~~Basis of Presentation, for additional information regarding the Company's computation of earnings (loss) per common share.~~

The following table sets forth the computation of basic and diluted earnings (loss) per common share for the three and nine months ended December ~~31, 2016~~26, 2020, and ~~2017:~~December 28, 2019:


	Three Months Ended				Nine Months Ended
(in thousands, except per share data)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Basic earnings (loss) per common share:
Numerator:
Net income (loss)	$	20,113	$	(78,483)	$	(68,307)	$	(149,264)

Denominator:
Weighted average common shares, basic	41,252		39,784		40,894		39,535
Dilutive effect of employee equity incentive plans	932		0		0		0
Weighted average common shares-diluted	42,184		39,784		40,894		39,535

Basic earnings (loss) per common share	$	0.49	$	(1.97)	$	(1.67)	$	(3.78)
Diluted earnings (loss) per common share	$	0.48	$	(1.97)	$	(1.67)	$	(3.78)

Potentially dilutive securities excluded from diluted earnings (loss) per common share because their effect is anti-dilutive	988		1,470		1,248		834

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands, except per share data) 2016 2017 2016 2017
Basic earnings (loss) per common share:
Numerator:
Net income (loss) $ 22,221
$ (49,504 ) $ 63,082
$ (10,723 )

Denominator:
Weighted average common shares, basic 32,242
32,075
32,260
32,384
Dilutive effect of employee equity incentive plans 584
—
635
—
Weighted average common shares-diluted 32,826
32,075
32,895
32,384

Basic earnings (loss) per common share $ 0.69
$ (1.54 ) $ 1.96
$ (0.33 )
Diluted earnings (loss) per common share $ 0.68
$ (1.54 ) $ 1.92
$ (0.33 )

Potentially dilutive securities excluded from diluted earnings (loss) per common share because their effect is anti-dilutive 473
968
573
1,107

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~~15.~~16. REVENUE AND MAJOR CUSTOMERS

The Company designs, ~~manufactures,~~builds, and markets collaboration solutions which combine legendary audio expertise and ~~sells headsets~~powerful video and conferencing capabilities to create endpoints that power meaningful human connections and provide solutions that make life easier when they work together and with our partner's services.

The Company’s major product categories are Headsets, Video, Voice, and Services. Headsets include wired and wireless communication headsets; Voice includes open Session Initiation Protocol (“SIP”) and native ecosystem desktop phones as well as conference room phones; Video includes video conferencing solutions and peripherals, such as cameras, speakers, and microphones. The broad portfolio of Services include video interoperability, hardware and support for ~~business~~our solutions and ~~consumer applications. With respect~~hardware devices, as well as professional, hosted, and managed services that are grounded in our deep expertise aimed at helping customers achieve their goals for collaboration. The Company's cloud management and analytics software enables IT administrators to ~~headsets,~~configure and update firmware, monitor device usage, troubleshoot, and gain a deep understanding of user behavior. All of the ~~Company makes products for use~~Company's solutions are designed to integrate seamlessly with the platform and services of our customers choice in a wide range of Unified Communications & Collaboration ("UC&C"), Unified Communication as a Service ("UCaaS"), and Video as a Service ("VaaS") environments.

Product revenue is largely comprised of sales of hardware devices, peripherals, and platform software licenses used in communication and collaboration in offices and contact centers, ~~and,~~ with mobile devices, cordless phones, ~~computers,~~ and ~~gaming consoles.~~ computers. Services revenue primarily includes support on hardware devices, professional, hosted and managed services, and solutions to the Company's customers. Revenue in the first and second quarter of fiscal year 2021 from a certain product has been reclassified from the Voice product category into the Video product category as a result of a management decision to re-align its product categories.

The following table ~~presents net~~disaggregates revenues by major product ~~group~~category for the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017:~~December 28, 2019:


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Net revenues from unaffiliated customers:
Headsets1	240,908		167,280		618,498		592,222
Voice2	67,076		79,494		156,682		281,794
Video2	112,727		69,859		284,666		220,499
Services2	63,974		67,838		191,529		199,432
Total net revenues	$	484,685	$	384,471	$	1,251,375	$	1,293,947

1 As announced on February 4, 2020, the Company entered into a definitive agreement with Nacon S.A. and closed the transaction on March 19, 2020, completing the sale of the Company's Consumer Gaming assets for a net amount that is not material to the Company's condensed consolidated financial statements. The remaining consumer headsets are included in the Company's Enterprise products and all prior periods have been reclassified to conform to current presentation.

2 Categories were introduced with the acquisition of Polycom on July 2, 2018, and amounts are presented net of purchase accounting adjustments.

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Net revenues from unaffiliated customers:
Enterprise $ 157,345
$ 167,640
$ 467,784
$ 485,152
Consumer 75,588
58,894
204,438
155,608
Total net revenues $ 232,933
$ 226,534
$ 672,222
$ 640,760

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For reporting purposes, revenue is attributed to each geographic region based on the location of the customer. Other than the U.S., no country accounted for 10% or more of the Company's net revenues for the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017.~~December 28, 2019. The following table presents net revenues by geography:


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Products
Net revenues from unaffiliated customers:
U.S.	$	169,812	$	149,652	$	473,633	$	536,368

Europe and Africa	164,896		88,356		357,389		301,134
Asia Pacific	57,481		54,920		155,460		180,993
Americas, excluding U.S.	28,522		23,705		73,364		76,020
Total international net revenues	250,899		166,981		586,213		558,147
Product net revenues	$	420,711	$	316,633	$	1,059,846	$	1,094,515

Services
Net revenues from unaffiliated customers:
U.S.	$	23,601	$	26,204	$	71,839	$	77,442

Europe and Africa	16,533		17,575		48,545		50,749
Asia Pacific	19,342		18,710		57,196		54,938
Americas, excluding U.S.	4,498		5,349		13,949		16,303
Total international net revenues	40,373		41,634		119,690		121,990
Service net revenues	$	63,974	$	67,838	$	191,529	$	199,432

Total net revenues	$	484,685	$	384,471	$	1,251,375	$	1,293,947

Three Months Ended December 31, Nine Months Ended
December 31,
(in thousands) 2016 2017 2016 2017
Net revenues from unaffiliated customers:
U.S. $ 123,719
$ 106,455
$ 371,019
$ 326,360

Europe and Africa 63,233
73,620
168,722
184,761
Asia Pacific 27,164
27,553
81,979
75,664
Americas, excluding U.S. 18,817
18,906
50,502
53,975
Total international net revenues 109,214
120,079
301,203
314,400
Total net revenues $ 232,933
$ 226,534
$ 672,222
$ 640,760

~~One customer,~~NaN customers, Ingram Micro Group and ScanSource, accounted for ~~10.5%~~19.1% and ~~10.6%~~17.1%, respectively, of net revenues for the three months ended December 26, 2020. Ingram Micro Group and ScanSource, accounted for 12.6% and 10.5%, respectively, of net revenues for the nine months ended December ~~31, 2016. One customer,~~26, 2020. NaN customers, ScanSource and Ingram Micro Group, accounted for ~~10.7%~~19.2% and ~~11.6%~~12.7% of net revenues for the three ~~and nine~~ months ended December ~~31, 2017,~~28, 2019, respectively.

~~One customer,~~ ScanSource and Ingram Micro Group accounted for ~~17.6%~~19.5% and 15.7%, respectively, of ~~total~~ net ~~accounts receivable at March 31, 2017. Two~~revenue for the nine months ended December 28, 2019.

NaN customers, Ingram Micro Group and ~~D&H Distributors,~~ScanSource accounted for ~~13.5%~~21.5% and ~~13.8%~~19.6%, respectively, of total net accounts receivable at December ~~31, 2017.~~26, 2020. NaN customers, Ingram Micro Group, ScanSource, and Synnex Group, accounted for 22.2%, 17.3%, and 15.6%, respectively, of total net accounts receivable at March 28, 2020.

Revenue is recognized when obligations under the terms of a contract with the Company's customer are satisfied; generally, this occurs with the transfer of control of its products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The majority of the Company's business relates to physical product shipments, for which revenue is generally recognized once title and risk of loss of the product are transferred to the customer. The Company believes that transfer of title and risk of loss best represent the moment at which the customer’s ability to direct the use of and obtain substantially all the benefits of an asset have been achieved. The Company has elected to account for shipping and handling as fulfillment cost and recognize the related costs when control over products have transferred to the customer as an expense in Cost of Revenues.

~~16.~~

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The Company's service revenue is recognized either over-time or at a point-in-time depending on the nature of the offering. Revenues associated with non-cancelable maintenance and support contracts comprise approximately 90% of the Company's overall service revenue and are recognized ratably over the contract term, which typically ranges between one and three years. The Company believes this recognition period faithfully depicts the pattern of transfer of control for maintenance and support as the services are a series of distinct services available and delivered daily over the term. For certain products, support is provided free of charge without the purchase of a separate maintenance contract. If the support is determined to rise to the level of a performance obligation, the Company allocates a portion of the transaction price to the implied support obligation and recognizes service revenue over the estimated implied support period which can range between one month to several years, depending on the circumstances. Revenues associated with Professional Services are recognized when the Company has objectively determined that the obligation has been satisfied, which is usually upon customer acceptance.

The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company allocates the transaction price of a contract, to each identified performance obligation based on stand-alone selling price (“SSP”). The Company determines if variable consideration is associated with one or many, but not all of the performance obligations and allocates accordingly. Judgment is also required to determine the SSP for each distinct performance obligation. The Company derives SSP for its performance obligations through a stratification methodology and considers a few characteristics including consideration related to different service types, customer and geography characteristics. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs.

On occasion, the Company will fulfill only part of a purchase order due to lack of current availability for one or more items requested on an order. Its practice is to ship what is on hand, with the remaining goods shipped once the product is in stock. Shipment generally occurs less than one year from the date of the order. Depending on the terms of the contract or operationally, undelivered or backordered items may be canceled by either party at their discretion.

As of December 26, 2020, the Company's deferred revenue balance was $216.4 million. As of March 28, 2020, the Company's deferred revenue balance was $208.5 million. During the three months ended December 26, 2020, the Company recognized $50.9 million in revenues that were reflected in deferred revenue at the beginning of the period.

The table below represents aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of December 26, 2020:


	December 26, 2020
(in millions)	Current		Noncurrent		Total
Performance obligations	$	147.8	$	69.5	$	217.3

Upon establishment of creditworthiness, the Company may extend credit terms to its customers which typically ranges between 30 and 90 days from the date of invoice depending on geographic region and type of customer. The Company typically bills upon product hardware shipment, at time of software activation, upon the start of service entitlement, or upon completion of services. Revenue is not generally recognized in advance of billings. The balance of contract assets as of December 26, 2020 was $6.3 million. As of March 28, 2020, the Company's contract assets balance was $3.7 million. None of the Company's contracts are deemed to have significant financing components.

Sales, value add, and other taxes collected concurrent with revenue producing activities are excluded from revenue.

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Commercial distributors and retailers represent the Company's largest sources of net revenues. Sales through its distribution and retail channels are made primarily under agreements allowing for rights of return and include various sales incentive programs, such as back end rebates, discounts, marketing development funds, price protection, and other sales incentives. The Company has an established sales history for these arrangements and the Company records the estimated reserves at the inception of the contract as a reflection of the reduced transaction price. Customer sales returns are estimated based on historical data, relevant current data, and the monitoring of inventory build-up in the distribution channel. Revenue reserves represent a reasonable estimation made by management and are subject to significant judgment. Estimated reserves may differ from actual returns or incentives provided, due to unforeseen customer return or claim patterns or changes in circumstances. For certain customer contracts which have historically demonstrated variability, the Company has considered the likelihood of being under-reserved and has considered a constraint accordingly. Provisions for Sales Returns are presented within accrued liabilities in the Company's condensed consolidated balance sheets. Provisions for promotions, rebates, and other sales incentives are presented as a reduction of accounts receivable unless there is no identifiable right offset, in which case they are presented within accrued liabilities on its condensed consolidated balance sheets. See Note 5, Details of Certain Balance Sheet Accounts above for additional details.

For certain arrangements, the Company pays commissions, bonuses and taxes associated with obtaining the contracts. The Company capitalizes such costs if they are deemed to be incremental and recoverable. The Company has elected to use the practical expedient to record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Determining the amortization period of costs related to obtaining a contract involves judgment. Capitalized commissions and related expenses, on hardware sales and services recognized at a point in time generally have an amortization period of less than one year. Maintenance-related performance obligations generally have an amortization period greater than one year when considering renewals. Capitalized commissions are amortized to Sales and Marketing Expense on a straight-line basis. The capitalized amount of incremental and recoverable costs of obtaining contracts with an amortization period of greater than one year are $4.8 million as of December 26, 2020. Amortization of capitalized contract costs for the three and nine months ended December 26, 2020 was immaterial and $1.6 million, respectively.

17. SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

The Company's Chief Executive Officer is identified as its Chief Operating Decision Maker ("CODM"). The CODM has organized the Company, manages resource allocations and measures performance among its 2 operating segments — Products and Services.

The Products segment includes the Company's Headsets, Voice and Video product lines. The Services segment includes maintenance support on hardware devices as well as professional, managed and cloud services and solutions. In managing the 2 operating segments the CODM uses information about their revenue and gross margin after adjustments to exclude certain non-cash transactions and activities that are not reflective of the Company's ongoing or core operations as further described below. The CODM does not review asset information by segment.

Purchase accounting amortization: Represents the amortization of purchased intangible assets recorded in connection with the Acquisition of Polycom.

Deferred revenue purchase accounting: Represents the impact of fair value purchase accounting adjustments related to deferred revenue recorded in connection with the Acquisition of Polycom. The Company's deferred revenue primarily relates to Service revenue associated with non-cancelable maintenance support on hardware devices which are typically billed in advance and recognized ratably over the contract term as those services are delivered. This adjustment represents the amount of additional revenue that would have been recognized during the period absent the write-down to fair value required under purchase accounting guidelines.

Consumer optimization: Represents charges related to inventory reserves and supplier liabilities for excess and obsolete inventory incurred in connection with the Company's strategic action to optimize its Consumer product portfolio.

Integration and rebranding costs: Represents charges incurred in connection with the Acquisition and integration of Polycom such as system implementations, legal and accounting fees.

Stock compensation expense: Represents the non-cash expense associated with the Company's issuance of common stock and share-based awards to employees and non-employee directors.

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The following table presents segments results for revenue and gross margin, as reviewed by the CODM, and their reconciliation to the Company's condensed consolidated GAAP results:


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Segment revenues as reviewed by CODM
Products	$	420,976	$	317,058	$	1,060,733	$	1,096,037
Services	66,998		74,544		203,250		225,725
Total segment revenues as reviewed by CODM	$	487,974	$	391,602	$	1,263,983	$	1,321,762

Segment gross profit as reviewed by CODM
Products	$	201,392	$	138,909	$	492,262	$	543,706
Services	45,812		54,421		138,329		152,785
Total segment gross profit as reviewed by CODM	$	247,204	$	193,330	$	630,591	$	696,491


	Three Months Ended				Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Total segment revenues as reviewed by CODM	$	487,974	$	391,602	$	1,263,983	$	1,321,762
Deferred revenue purchase accounting	(3,289)		(7,131)		(12,608)		(27,815)
Consolidated GAAP net revenues	$	484,685	$	384,471	$	1,251,375	$	1,293,947

Total segment gross profit as reviewed by CODM (1)	$	247,204	$	193,330	$	630,591	$	696,491
Purchase accounting amortization	(16,459)		(30,819)		(51,873)		(91,535)
Deferred revenue purchase accounting	(3,289)		(7,131)		(12,608)		(27,815)
Consumer optimization	0		(10,415)		0		(10,415)
Integration and rebranding costs	0		(100)		0		(1,169)
Stock-based compensation	(799)		(1,019)		(2,374)		(2,994)
Consolidated GAAP gross profit	$	226,657	$	143,846	$	563,736	$	562,563

(1) Includes depreciation expense of $3.7 million and $4.0 million for the three months ended December 26, 2020 and December 28, 2019, respectively. Includes depreciation expense of $10.7 million and $11.3 million for the nine months ended December 26, 2020 and December 28, 2019, respectively.

18. SUBSEQUENT EVENTS

~~On January 30, 2018, the Company announced that its Audit Committee had declared and approved the payment~~None.

Table of ~~a dividend of~~ ~~$0.15~~ ~~per share on~~ ~~March 9, 2018~~ ~~to holders of record on~~ ~~February 20, 2018~~.Contents

Quantitative and Qualitative Disclosures About Market Risk

The discussion of our exposure to market risk related to changes in interest rates and foreign currency exchange rates 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 discussed in Part I, "Item 1A. Risk ~~Factors"~~Factors" in our Annual Report on Form 10-K for the fiscal year ended March ~~31, 2017~~,28, 2020, filed with the SEC on ~~May 10, 2017~~.June 8, 2020, which could materially affect our business, financial position, or future results of operations.

Except as described below, there have been no material changes in our market risk as described in our Annual Report on Form 10-K for the fiscal year ended March 28, 2020.

INTEREST RATE RISK

~~We reported the following balances in cash and cash equivalents, short-term investments, and long-term investments as follows:~~

(in millions) March 31, 2017 December 31, 2017
Cash and cash equivalents $ 302.0
$ 280.3
Short-term investments $ 178.2
$ 218.8
Long-term investments $ 127.2
$ 118.9

~~As of~~ ~~December 31, 2017, our investments were composed of Mutual Funds, US Treasury Notes, Government Agency Securities, Commercial Paper, Corporate Bonds, and Certificates of Deposits ("CDs").~~

~~Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements.~~ Our exposure to market risk for changes in interest rates relates primarily to our ~~investment portfolio. Our investment policy generally limits~~floating-rate interest payments under our $1.275 billion term loan facility. In connection with the ~~amount~~Acquisition, we entered into a Credit Agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (the “Credit Agreement”). Borrowings under the Credit Agreement bear interest at a variable rate equal to (i) LIBOR plus a specified margin, or (ii) the base rate (which is the highest of ~~credit~~(a) the prime rate publicly announced from time to time by Wells Fargo Bank, National Association, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR plus a specified margin.

On July 30, 2018, we entered into a 4-year amortizing interest rate swap agreement with Bank of America, N.A. as part of our overall strategy to manage our exposure to ~~any one issuer~~market risks associated with fluctuations in interest rates on the $1.275 billion term loan facility. As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk, and requires investments to be high credit quality, primarily rated A or A2 and above, 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 effective maturity date. All short-term investments have effective maturities of less than 12 months, while all long-term investments have effective maturities greater than 12 months or we do not ~~currently~~use derivatives for trading or speculative purposes. Our objective is to mitigate the impact of interest expense fluctuations on our profitability related to interest rate changes by minimizing movements in future debt payments with this interest rate swap.

The swap has an initial notional amount of $831 million and matures on July 31, 2022. The swap involves the receipt of floating-rate interest payments for fixed interest rate payments over the life of the agreement. We have designated this interest rate swap as a cash flow hedge, the ~~ability~~effective portion of changes in the fair value of the derivative is recorded to ~~liquidate~~other comprehensive income (loss) on the ~~investment.~~accompanying balance sheets and reclassified into interest expense over the life of the agreement. We ~~may sell our investments prior~~will review the effectiveness of this instrument on a quarterly basis, recognize current period hedge ineffectiveness immediately in earnings and will discontinue hedge accounting if we no longer consider hedging to ~~their stated maturities for strategic purposes, in anticipation~~be highly effective. For additional details, refer to Note 13, Derivatives, of ~~credit deterioration, or for duration management. No material realized or unrealized gains or losses were recognized during~~ the ~~three and~~accompanying notes to condensed consolidated financial statements. During the nine months ended December ~~31, 2016~~26, 2020, we made payments of approximately $10.1 million on our interest rate swap and ~~2017.~~recognized $10.3 million within interest expense on the condensed consolidated statement of operations. As of December 26, 2020, we had $0.9 million of interest accrued within accrued liabilities on the condensed consolidated balance sheet. We had an unrealized pre-tax loss of approximately $13.1 million recorded within accumulated other comprehensive income (loss) as of December 26, 2020. A hypothetical 10% increase or decrease on market interest rates related to our outstanding term loan facility could result in a corresponding increase or decrease in annual interest expense of approximately $0.1 million.

Interest rates were ~~relatively unchanged~~lower in the three and nine months ended December ~~31, 2017~~26, 2020 compared to the same period in the prior year. In the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019 we generated interest income of ~~$0.9~~$0.0 million and ~~$2.6~~$0.2 million and ~~$1.4~~$0.1 million and ~~$3.4~~$0.6 million, respectively.. We incurred no significant interest expense from our revolving line of credit in the three and nine months ended December 31, 2017. The 5.50% Senior Notes are at a fixed interest rate and we have not elected the fair value option for these instruments; accordingly we are not exposed to any economic interest rate risk related to this indebtedness; however, the fair value of this instrument fluctuates as market interest rates change. The increase in interest expense caused by a 10 basis point increase in the interest rates of our variable-rate revolving line of credit indebtedness would not be significant. A hypothetical 10 basis points increase or decrease on market interest rates related to our investment portfolio would have an immaterial impact on our results of operations.respectively.

FOREIGN CURRENCY EXCHANGE RATE RISK

We are a net receiver of currencies other than the USD. Accordingly, changes in exchange rates, and in particular a strengthening of the USD, could negatively affect our net revenues and gross margins as expressed in USD. There is a risk that we will have to adjust local currency product pricing due to competitive pressures if there is significant volatility in foreign currency exchange rates.

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The primary currency fluctuations to which we are exposed are the Euro ("EUR"), British Pound Sterling ("GBP"~~), Australian Dollar ("AUD"), Canadian Dollar ("CAD"~~), Mexican Peso ("MXN"), and the Chinese Renminbi ("RMB"). 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, AUD,~~ and ~~CAD~~GBP denominated cash, accounts receivable, and accounts payable balances, and our economic exposure by hedging a portion of anticipated EUR and GBP denominated sales and our MXN denominated expenditures. We can provide no assurance that our strategy will be successful in the future or that exchange rate fluctuations will not materially adversely affect our business. We do not hold or issue derivative financial instruments for speculative trading purposes.

The impact of changes in foreign currency rates recognized in other income and (expense), net was immaterial in both the three and nine months ended December ~~31, 2016~~26, 2020 and ~~2017.~~December 28, 2019. Although we hedge a portion of our foreign currency exchange exposure, the weakening of certain foreign currencies, particularly the EUR and GBP in comparison to the USD, could result in material foreign exchange losses in future periods.

Non-designated Hedges

We hedge our EUR ~~GBP, AUD,~~ and ~~CAD~~GBP denominated cash, accounts receivable, and accounts payable 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 December ~~31, 2017~~26, 2020 (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 EUR	$	110.9	$	11.1	$	(11.1)
GBP	Sell GBP	$	15.8	$	1.6	$	(1.6)

Collectively, our swap contracts hedge against a portion of our forecasted MXN denominated expenditures. As of December 26, 2020, we had cross-currency swap contracts with notional amounts of approximately MXN 389.0 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 December, 26, 2020 (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 MXN	$	19.0	$	(1.9)	$	1.9

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 EUR $ 46.6
$ 4.7
$ (4.7 )
GBP Sell GBP $ 6.9
$ 0.7
$ (0.7 )
AUD Sell AUD $ 11.1
$ 1.1
$ (1.1 )
CAD Sell CAD $ 2.3
$ 0.2
$ (0.2 )

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Cash Flow Hedges

In the nine months ended December ~~31, 2017, 49%~~26, 2020, approximately 50% of our net revenues were derived from sales outside of the U.S. and denominated primarily in EUR and GBP.

As of December ~~31, 2017~~,26, 2020, we had foreign currency put and call option contracts with notional amounts of approximately ~~€75.8~~€68.0 million and ~~£22.9~~£13.0 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 realize a gain of ~~$7.7~~$4.0 million or incur a loss of ~~$9.5~~$9.6 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 open option contract type for cash flow hedges as of December ~~31, 2017~~26, 2020 (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	$	101.5	$	2.0	$	(7.5)
Put options	$	94.0	$	3.7	$	(0.3)
Forwards	$	89.5	$	9.2	$	(9.2)

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 $ 122.0
$ 4.9
$ (9.2 )
Put options $ 112.6
$ 2.8
$ (0.3 )
Forwards $ 21.0
$ 2.1
$ (2.1 )

~~Collectively, our swap contracts hedge against a portion~~Table of ~~our forecasted MXN denominated expenditures. As of~~ ~~December 31, 2017, we had cross-currency swap contracts with notional amounts of approximately MXN~~ ~~76.3 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~~ ~~December 31, 2017~~ ~~(in millions):~~

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Currency - cross-currency swap contracts Position USD Value of Net Foreign Exchange Contracts Foreign Exchange Loss From 10% Appreciation of USD Foreign Exchange Gain From 10% Depreciation of USD
MXN Buy MXN $ 3.9
$ (0.3 ) $ 0.4

Controls and Procedures


~~(a)~~	~~Evaluation of disclosure controls and procedures~~

(a)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 Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report 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 our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


~~(b)~~	~~Changes in internal control over financial reporting~~

(b)Changes in internal control over financial reporting

There have ~~not~~ been ~~any~~no changes in the Company’s internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

PART II -- OTHER INFORMATION

LEGAL PROCEEDINGS

We are presently engaged in various legal actions arising in the normal course of 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. For additional information about our material legal proceedings, please see Note 6, 7, Commitments and Contingencies, of the accompanying notes to the condensed consolidated financial statements.

RISK FACTORS

You should carefully consider the risk factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March ~~31, 2017,~~28, 2020, filed with the SEC on ~~May 10, 2017~~June 8, 2020 (the "Form 10-K"), each of which could materially affect our business, financial position, or future results of operations. Except as described below, there have been no material changes to the risk factors included in the Form 10-K.

~~Changes in applicable tax regulations and resolutions of tax disputes could negatively affect our financial results.~~

The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The changes included in the Tax Act are broad and complex. As rule making bodies and new legislation is enacted to interpret the Tax Act, these changes may adjust the estimates provided in this report. The changes may possibly be material, due to, among other things, the Treasury Department’s promulgation of regulations and guidance that interpret the Tax Act, corrective technical legislative amendments that may change the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the company has utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries.

In addition, it is uncertain how each country where we do business may react to the Tax Act. Moreover, the evolving global tax landscape accompanying the adoption and guidance associated with the Base Erosion and Profit Shifting reporting requirements (“BEPS") recommended by the G8, G20 and Organization for Economic Cooperation and Development ("OECD") may require us to make adjustments to our financial results. As these and other tax laws and related regulations change, our financial results could be materially impacted. Given the unpredictability of these possible changes, it is difficult to assess whether the overall effect of these potential tax changes would be positive or negative for our earnings and cash flow, but such changes could adversely impact our financial results.

We are also subject to examination by the Internal Revenue Service ("IRS") and other tax authorities, including state revenue agencies and foreign governments. While we regularly assess the likelihood of favorable or unfavorable outcomes resulting from examinations by the IRS and other tax authorities to determine the adequacy of our provision for income taxes, there can be no assurance that the actual outcome resulting from these examinations will not materially adversely affect our financial condition and results of operations.

The risks described here and onin the Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations.

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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Share Repurchase Programs~~

The following table presents ~~a month-to-month summary~~information with respect to repurchases of ~~the~~our common stock ~~purchase activity in~~made by us during the third quarter of fiscal year ~~2018:~~2021:

Total Number of Shares Purchased ¹

Average Price Paid per Share ²

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ¹

Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁶
October 1, 2017 to October 28, 2017 212,580
³
$ 45.06
210,370
818,216
October 29, 2017 to November 25, 2017 74,371
⁴
$ 47.82
72,678
745,538
November 26, 2017 to December 30, 2017 18,821
⁵
$ 50.48
14,606
730,932


	Total Number of Shares Purchased 1		Average Price Paid per Share 2	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs 1	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs 3
September 27, 2020 to October 24, 2020	433	4	N/A	—	1,369,014
October 25, 2020 to November 21, 2020	3,279	4	N/A	—	1,369,014
November 22, 2020 to December 26, 2020	2,502	4	N/A	—	1,369,014



1		On ~~July 27, 2017 the~~November 28, 2018, our Board of Directors ~~authorized~~approved a 1 million shares repurchase program expanding our capacity to repurchase ~~1,000,000~~ shares ~~of our common stock~~to approximately 1.7 million shares. We may repurchase shares from time to time in ~~the~~ open market transactions or inthrough privately negotiated ~~repurchases as determined by management.~~transactions. There is no expiration date associated with the repurchase activity.

2		"Average Price Paid per Share" reflects open market repurchases of common stock only.

3		~~Includ~~es ~~2,210 shares~~These shares reflect the available shares authorized for repurchase under the expanded program approved by the Board on November 28, 2018.

4		Represents only shares that were tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock ~~granted~~grants under our stock plans.

4	~~Includes 1,693 shares~~ ~~that were tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.~~

5	~~Includes 4,215 shares~~ ~~that were tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.~~

6	~~These shares reflect the available shares authorized for repurchase under the program approved by the Board on July 27, 2017.~~

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MINE SAFETY DISCLOSURES

Not applicable.

OTHER INFORMATION

None.

EXHIBITS

We have filed the following documents as Exhibits to this Form 10-Q:

Exhibit Number

Incorporation by Reference

Filed Herewith

Exhibit Description

Form

File No.

Exhibit

Filing Date

~~Exhibit Number~~31.1

~~Incorporation by Reference~~

~~Filed Herewith~~

~~Exhibit Description~~

~~Form~~

~~File No.~~

~~Exhibit~~

~~Filing Date~~

~~31.1~~

Certification of the President and CEO Pursuant to Rule 13a-14(a)/15d-14(a).

31.2

Certification of ~~Senior~~Executive Vice President and CFO Pursuant to Rule 13a-14(a)/15d-14(a).

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

101.INS

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101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

Inline XBRL Taxonomy Definition Linkbase Document

104

Cover Page Interactive Data File, (formatted as Inline XBRL and contained in Exhibit 101)

Table of Contents

Plantronics, Inc.

FORM 10-Q

CROSS REFERENCE TABLE


Item Number	Page(s)
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	15	-	41

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	4	-	14

Item 3. Quantitative and Qualitative Disclosures about Market Risk	42	-	45

Item 4. Control and Procedures	45

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	45

Item 1A. Risk Factors	45

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 5. Other Information	47

Item 6. Exhibits	47

Signatures	49

Item Number Page(s)
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
15
-
34

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
3
-
14

Item 3. Quantitative and Qualitative Disclosures about Market Risk
35
-
37

Item 4. Control and Procedures
37

PART II. OTHER INFORMATION

Item 1. Legal Proceedings
37

Item 1A. Risk Factors
37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
39

Item 6. Exhibits
40

Signatures
41

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		PLANTRONICS, INC.

Date:	~~January 30, 2018~~February 4, 2021	By:	/s/ ~~Pamela Strayer~~Charles D. Boynton
		Name:	~~Pamela Strayer~~Charles D. Boynton
		Title:	~~Senior~~Executive Vice President and Chief Financial Officer



Delaware			77-0207692
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PLT	New York Stock Exchange



Large accelerated filerx	☒		Accelerated filero	☐
Non-accelerated filero	☐		Smaller reporting companyo	☐
			Emerging growth companyo
		~~(Do not check if a smaller reporting company)~~	☐



x☒			QUARTERLY 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



PART I. FINANCIAL INFORMATION			Page No.

Management's Discussion and Analysis of Financial Condition and Results of Operations			34

Overview			35

Results of Operations			57

Financial Condition			1012

Off Balance Sheet Arrangements and Contractual Obligations			13

Critical Accounting Estimates			14

Financial Statements (Unaudited):			15

Condensed Consolidated Balance Sheets as of December 26, 2020 and March ~~31, 2017 and December 31, 2017~~28, 2020			15

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019			16

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019			17

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December ~~31, 2016~~26, 2020 and ~~2017~~December 28, 2019			18

Condensed Consolidated Statements of Stockholders' (Deficit) / Equity for the Three and Nine Months Ended December 26, 2020 and December 28, 2019			19

Notes to Condensed Consolidated Financial Statements			1921

Quantitative and Qualitative Disclosures About Market Risk			3542

Controls and Procedures			3745

PART II. OTHER INFORMATION

Legal Proceedings			3745

Risk Factors			3745

Unregistered Sales of Equity Securities and Use of Proceeds			3946

~~Exhibits~~Mine Safety Disclosures			4047

Other Information			47

Exhibits			47

Cross Reference Table			4048

Signatures			4149



~~Net Revenues~~ ~~(in millions)~~ 5 Table of Contents	~~Operating Income~~ ~~(in millions)~~



(in millions)	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Toll charge	$	69.3	$	5.5	$	11.0	$	11.2	$	41.6



	Three Months Ended December 31,						Nine Months Ended December 31,
	2016			2017			2016			2017
Net revenues	$	232,933		$	226,534		$	672,222		$	640,760
Cost of revenues	122,753			112,409			338,523			315,720
Gross profit	110,180			114,125			333,699			325,040
Operating expenses:
Research, development, and engineering	21,393			21,257			66,116			62,402
Selling, general, and administrative	56,919			56,196			169,581			170,125
(Gain) loss, net from litigation settlements	(103		)	(15		)	4,287			(295		)
Restructuring and other related charges (credits)	113			(84		)	(1,350		)	2,438
Total operating expenses	78,322			77,354			238,634			234,670
Operating income	31,858			36,771			95,065			90,370
Interest expense	(7,322		)	(7,341		)	(21,867		)	(21,904		)
Other non-operating income and (expense), net	427			2,490			4,119			5,230
Income before income taxes	24,963			31,920			77,317			73,696
Income tax expense	2,742			81,424			14,235			84,419
Net income (loss)	$	22,221		$	(49,504	)	$	63,082		$	(10,723	)

Earnings (Loss) per common share:
Basic	$	0.69		$	(1.54	)	$	1.96		$	(0.33	)
Diluted	$	0.68		$	(1.54	)	$	1.92		$	(0.33	)

Shares used in computing earnings (loss) per common share:
Basic	32,242			32,075			32,260			32,384
Diluted	32,826			32,075			32,895			32,384

Cash dividends declared per common share	$	0.15		$	0.15		$	0.45		$	0.45


	Three Months Ended December 26, 2020
	Common Stock			Additional Paid-In		Accumulated Other Comprehensive		Accumulated		Treasury		Total Stockholders'
	Shares	Amount		Capital		Loss		Deficit		Stock		Deficit
Balances at September 26, 2020	41,246	$	907	$	1,526,677	$	(9,650)	$	(796,324)	$	(866,615)	$	(145,005)
Net Income	—	—		—		—		20,113		—		20,113

Net unrealized gains (losses) on cash flow hedges, net of tax	—	—		—		938		—		—		938

Proceeds from issuances under stock-based compensation plans	19	—		—		—		—		—		—



Stock-based compensation	—	—		11,486		—		—		—		11,486


Employees' tax withheld and paid for restricted stock and restricted stock units	(6)	—		—		—		—		(144)		(144)



Other equity changes	—	—		(3)		(409)		3		—		(409)
Balances at December 26, 2020	41,259	$	907	$	1,538,160	$	(9,121)	$	(776,208)	$	(866,759)	$	(113,021)


	Three Months Ended December 28, 2019
	Common Stock			Additional Paid-In		Accumulated Other Comprehensive		Retained Earnings (Accumulated		Treasury		Total Stockholders'
	Shares	Amount		Capital		Loss		Deficit)		Stock		Equity
Balances at September 28, 2019	39,917	$	890	$	1,465,978	$	(5,351)	$	60,545	$	(862,955)	$	659,107
Net Income	—	—		—		—		(78,483)		—		(78,483)

Net unrealized gains (losses) on cash flow hedges, net of tax	—	—		—		(74)		—		—		(74)

Proceeds from issuances under stock-based compensation plans	28	1		—		—		—		—		1
Repurchase of restricted common stock	(3)	—		—		—		—		—		—

Cash dividends	—	—		—		—		(5,988)		—		(5,988)
Stock-based compensation	—	—		13,902		—		—		—		13,902


Employees' tax withheld and paid for restricted stock and restricted stock units	(13)	—		—		—		—		(388)		(388)




Balances at December 28, 2019	39,929	$	891	$	1,479,880	$	(5,425)	$	(23,926)	$	(863,343)	$	588,077


	Nine Months Ended December 26, 2020
	Common Stock			Additional Paid-In		Accumulated Other Comprehensive		Accumulated		Treasury		Total Stockholders'
	Shares	Amount		Capital		Loss		Deficit		Stock		Deficit
Balances at March 28, 2020	40,406	$	896	$	1,501,340	$	(13,582)	$	(707,904)	$	(863,566)	$	(82,816)
Net loss	—	—		—		—		(68,307)		—		(68,307)

Net unrealized gains (losses) on cash flow hedges, net of tax	—	—		—		4,870		—		—		4,870

Proceeds from issuances under stock-based compensation plans	667	6		—		—		—		—		6
Repurchase of restricted common stock	(10)	—		—		—		—		—		—


Stock-based compensation	—	—		31,104		—		—		—		31,104


Employees' tax withheld and paid for restricted stock and restricted stock units	(261)	—		—		—		—		(3,193)		(3,193)

Proceeds from ESPP	457	5		5,719		—		—		—		5,724

Other equity changes	—	—		(3)		(409)		3		—		(409)
Balances at December 26, 2020	41,259	$	907	$	1,538,160	$	(9,121)	$	(776,208)	$	(866,759)	$	(113,021)


	Nine Months Ended December 28, 2019
	Common Stock			Additional Paid-In		Accumulated Other Comprehensive		Retained Earnings (Accumulated		Treasury		Total Stockholders'
	Shares	Amount		Capital		Loss		Deficit)		Stock		Equity
Balances at March 30, 2019	39,518	$	884	$	1,431,607	$	(475)	$	143,344	$	(853,673)	$	721,687
Net Income	—	—		—		—		(149,264)		—		(149,264)
Foreign currency translation adjustments	—	—		—		(219)		—		—		(219)
Net unrealized gains (losses) on cash flow hedges, net of tax	—	—		—		(4,731)		—		—		(4,731)

Proceeds from issuances under stock-based compensation plans	400	5		751		—		—		—		756
Repurchase of restricted common stock	(32)	—		—		—		—		—		—

Cash dividends	—	—		—		—		(17,910)		—		(17,910)
Stock-based compensation	—	—		41,499		—		—		—		41,499


Employees' tax withheld and paid for restricted stock and restricted stock units	(225)	—		—		—		—		(9,670)		(9,670)

Proceeds from ESPP	268	2		6,023		—		—		—		6,025
Impact of new accounting standards adoption	—	—		—		—		(89)		—		(89)
Other equity changes	—	—		—		—		(7)		—		(7)
Balances at December 28, 2019	39,929	$	891	$	1,479,880	$	(5,425)	$	(23,926)	$	(863,343)	$	588,077



December 31, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash & Cash Equivalents		Short-term investments (due in 1 year or less)		Long-term investments (due in 1 to 3 years)
Cash	$	272,063	$	—	$	—		$	272,063	$	272,063	$	—	$	—
Level 1:
Mutual Funds	14,298		399		(70		)	14,627		—		14,627		—
US Treasury Notes	71,684		—		(210		)	71,474		4,998		42,348		24,128
Money Market Funds	239		—		—			239		239		—		—
Subtotal	86,221		399		(280		)	86,340		5,237		56,975		24,128
Level 2:
Government Agency Securities	56,667		—		(276		)	56,391		—		31,300		25,091
Commercial Paper	32,944		—		—			32,944		2,993		29,951		—
Corporate Bonds	142,148		45		(375		)	141,818		—		77,175		64,643
Certificates of Deposits ("CDs")	28,383		—		(3		)	28,380		—		23,372		5,008
Subtotal	260,142		45		(654		)	259,533		2,993		161,798		94,742

Total cash, cash equivalents and investments measured at fair value	$	618,426	$	444	$	(934	)	$	617,936	$	280,293	$	218,773	$	118,870



March 31, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash & Cash Equivalents		Short-term investments (due in 1 year or less)		Long-term investments (due in 1 to 3 years)
Cash	$	295,877	$	—	$	—		$	295,877	$	295,877	$	—	$	—
Level 1:
Mutual Funds	12,079		352		(32		)	12,399		—		12,399		—
US Treasury Notes	35,960		—		(68		)	35,892		—		17,560		18,332
Money Market Funds	—		—		—			—		—		—		—
Subtotal	48,039		352		(100		)	48,291		—		29,959		18,332
Level 2:
Government Agency Securities	54,415		20		(164		)	54,271		—		15,309		38,962
Commercial Paper	47,152		—		—			47,152		6,093		41,059		—
Corporate Bonds	141,508		64		(224		)	141,348		—		73,676		67,672
Certificates of Deposits ("CDs")	20,383		3		—			20,386		—		18,176		2,210
Subtotal	263,458		87		(388		)	263,157		6,093		148,220		108,844

Total cash, cash equivalents and investments measured at fair value	$	607,374	$	439	$	(488	)	$	607,325	$	301,970	$	178,179	$	127,176



	March 31,			December 31,
(in thousands)	2017			2017
Accounts receivable	$	184,759		$	196,175
Provisions for returns	(10,541		)	(11,438		)
Provisions for promotions, rebates, and other	(32,438		)	(39,886		)
Provisions for doubtful accounts and sales allowances	(603		)	(932		)
Accounts receivable, net	$	141,177		$	143,919



	Nine months ended December 31, 2017
(in millions)	Total Charges		Restructuring and Other Related Charges (Credits)		Cost of Revenues		Selling, General, and Administrative
Severance benefits from reduction-in-force	$	1.3	$	1.3	$	—	$	—
Lease exit charge and asset impairments in Netherlands	0.7		0.7		—		—
Write-off of unrecoverable indirect tax asset in Brazil	0.7		—		0.7		—
Asset impairments related to previous Clarity operations	0.4		0.4		—		—
Loss on Clarity asset sale	0.9		—		0.9		—
Accelerated vesting of restricted stock	0.2		—		—		0.2
Totals	$	4.2	$	2.4	$	1.6	$	0.2



	Total Number of Shares Purchased ¹		Average Price Paid per Share ²		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ¹	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁶
October 1, 2017 to October 28, 2017	212,580	³	$	45.06	210,370	818,216
October 29, 2017 to November 25, 2017	74,371	⁴	$	47.82	72,678	745,538
November 26, 2017 to December 30, 2017	18,821	⁵	$	50.48	14,606	730,932