Greg Klaben – VP, IR Ken Kannappan – President and CEO Barbara Scherer – SVP, Finance & Administration and CFO

John Bright – Avondale Partners Paul Coster – JPMorgan Rohit Chopra – Wedbush Securities Reik Read – Robert Baird & Company Tavis McCourt – Morgan Keegan

Good afternoon. My name is Katina and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. Aft the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) :

Thanks you, Katina. Joining me today to discuss our second quarter fiscal 2010 financial results are Ken Kannappan, Plantronics’ President and CEO, and Barbara Scherer, Senior Vice President of Finance and Administration and CFO. I would like to remind you that during the course of today’s conference call we may make certain forward-looking statements that are subject to risks and uncertainties as outlined in today’s press release. As we have highlighted before, the risk factors in our press release and SEC filings are not standard boilerplate. We update these risk factors every quarter, adding and dropping language and changing the order depending upon the timing and potential impact of the concerns that we foresee. We believe forecasting our results of operations is difficult and we ask you to focus particular attention on these risk factors that could cause actual results to differ materially from those anticipated by any such statements. For further information, please refer to the company’s forms 10-K, 10-Q, today’s press release and other SEC filings. Plantronics second quarter fiscal 2010 net revenues were $167.4 million compared to guidance of $155 million to $160 million. Plantronics GAAP diluted loss per share was $0.02 in the second quarter compared with earnings per share of $0.36 in the same quarter of the prior year. Non-GAAP diluted earnings per share for the second quarter were $0.40 compared with earnings per share of $0.44 in the prior year quarter, and guidance of $0.27 to $0.32. The difference between GAAP and non-GAAP earnings per share for the current quarter includes a $25.2 million impairment charge along with assets of our audio entertainment group, restructuring and other related costs, purchase accounting amortization and the cost of stock-based compensation. I would like to remind you that on the Investor Relations section of our website we have an updated PowerPoint presentation as well as an analyst metric sheet with all of the financials and metrics released today. With that, I will turn the call over to Ken.

Thank you, Greg, and thank you all for taking the time to listen to our call. There are four major points that I want to focus on today. First one is our revenues. Our second quarter revenues were above our expectations as our markets remain stable and we experienced normal seasonal strengthening within the September quarter. We exceeded revenue guidance primarily due to higher than expected consumer revenues. Given the stabilization of the worldwide economy combined with the strengthening activity involving Unified Communications for voice, we believe we have an excellent opportunity to grow our long-term revenues at a faster compound annual growth rate than we have historically. As I have discussed in the past, Unified Communications is the most sizable market opportunity we have identified in our history. Previously I covered why companies are adopting it as well as how it would expand our opportunity for headset and other device sales. Conversations with early adopters of Unified Communications are validating the cost savings and productivity benefits and increasing momentum in the market. Looking forward, improved vendor releases, technical and business validation and improved economic conditions will create fertile ground for UC growth. Our UC is in such an early stage, the revenues remain relatively small. We are seeing concrete times of growth and the growth potential, and I want to share one of those with you. Earlier this calendar year, we indicated that we were involved in over 50 pilots. Since then we have had an increase in activity and ended the second quarter with over 500 pilots, almost all by Global 2000 sized enterprises. This is very encouraging although we expect these opportunities to take some time to translate into revenue. The pilot metric was historically a good gauge of activity, the one we don’t plan to provide going forward, because we believe it may not prove a meaningful guidance as technology becomes more mature and some corporations minimize their pilot saves. In our corporate presentation available in our website, we have outlined our expectation for the UC market and our addressable opportunity. The growth rate for the office market represents fundamental change in our headsets were deployed in the office. And with the catalyst of UC, we expect the office market which had grown by an average compound annual growth rate of just over 10% historically to grow at a rate closer to 19%, and we are more confident that by our fiscal 2015, this will represent a $350 million annual opportunity. The second topic I am going to cover is non-GAAP profitability. In our second quarter, our corporate gross margins improved slightly year-to-year to 44.9% and our operating margins remained 15.4%. Both our growths at the operating margins were within our long-term target model range despite revenues being down $49 million or 23% from the same quarter last year. Throughout this calendar year, we have taken actions to align our expense levels with the expectation of a long challenging economic environment. The key objective was to ensure corporate profitability at significantly lower revenue levels. The stabilization of our key markets increased our confidence that the worst is behind us. In the past, we have communicated that the target gross and operating margins for the audio communications group was 45% to 48% and 18% to 20% respectively. With the completion of the sale of Altec Lansing, these will become our new long-term corporate margin objectives. Given our confidence in long-term revenue growth has resulted the UC opportunity combined with the improvements to our cost structure; we have an excellent opportunity to grow long-term earnings. The third topic is a brief update on the sale of Altec Lansing. On October 23rd, we announced that through mutual agreement Plantronics and Profit Equity agreed to extend to close of the end of the transaction to not later than December 1st. This transaction remains subjected to closing conditions and there are risks these will be met. We are pleased to have found a strong buyer for the division and are confident that the Profit Equity and the Altec Lansing management team will continue to execute on the turnaround and enhance the value of the business to the brand. Finally, I would like to discuss our corporate reorganization announced earlier in October. For the last several years, Plantronics has been organized around product groups dedicated to separate markets supported by common functions of the classic matrix file. Given the tremendous relative size of UC for our business, we want to simplify our corporate structure and make sure our resources will focus on maximizing our prospects for success in this enormous market. We hope this will leave us better aligned and able to execute faster particularly where UC represents the convergence between mobile office and remote working markets. To conclude, we were very pleased to have attained our target margins at a much lower revenue level than last year. We continue to work hard to ensure that we invest in the future while maximizing current profitability. Given the rapid case of UC adoption, our outlook for long-term revenue and profit growth has never been better. With that, I would like to turn the call over to Barbara to review our second quarter results more completely.

Thanks, Ken. Overall our quarterly results were better than expected with net revenues exceeding the high end of our guidance provided on July 28th by approximately $7 million, primarily due to strength in our consumer products line assisted in part by lower discounts and resolutions of past claims and clearance of slower-moving consumer products in advance to the holiday season. We were also able to reinstate revenue recognition on shipment versus on cash collection on clarity products sold to an agency of the State of California, which added to be above forecast results. Our OCC revenues were in line with our guidance. Our non-GAAP EPS of $0.40 was also well above our guidance of $0.27 to $0.32, primarily due to the higher net revenues and associated gross profit as well as somewhat lower expenses than we had estimated. Our cost reduction efforts were on plan and contributed significantly to our operating results for the quarter. For example, compared to Q2 last year, non-GAAP expenses decreased by $12.9 million or 21%. Our non-GAAP operating profit was $25.8 million or 15.4% of net revenues, but we had a small GAAP loss driven by the further impairment of Altec Lansing assets. Turning to the audio communications group, net revenues of $144.5 million were down approximately 26% or $51 million compared to the second quarter last year. The decline was primarily driven by the weak global economic conditions compared to the year-ago period and the fact that in the year-ago quarter, we enjoyed very strong revenues in Bluetooth headsets due primarily to the California and Washington hands-free laws which were being impacted at that time. OCC net revenues were $93.5 million, a decrease of $26 million from the second quarter last year. On a sequential basis, OCC net revenues were down 3% and in line with our forecast. In fact, we are at the high end of our OCC forecasts. You might recall that we had indicated in July that the September quarter has tended to be a bit down for ACG particularly for OCC and that we were forecasting OCC to be down some on a sequential basis. The emerging markets Asia Pacific and Latin America started to grow, while the US was very stable, but AMEA declined 16%. We believe that the Q2 OCC results from AMEA likely represent a trough and that we should begin growing from here. We believe our market position is stable and that we are well positioned for future in this category as the global economies begin to recover and as you see gains momentum. Net revenues from Bluetooth headsets decreased 42% or $24.1 million. Again, please recall that in Q2 last year we were enjoying much higher demand brought on by the hands-free legislation in California and Washington, and most of the year-over-year decline is related to that. Sequentially, Bluetooth was up approximately 10%. Geographically, ACG’s decline in net revenues compared to Q2 last year were down 28% domestically and 22% internationally, resulting in a 65-35 domestic to international mix. And I am really pleased to report that ACG non-GAAP gross margin was 48.7% compared to 47.9% in the September quarter last year. This 0.8 point improvement was primarily due to 2 points from higher standard product margin, due to a higher OCC mix, higher Bluetooth product margins and lower discounts. 0.9 points from lower E&O requirements and partially offsetting these positive impacts on ACG gross margin were 2.1 points from the impact of lower production volumes on absorption of factory costs among other items. ACG had a non-GAAP operating margin of 18.5% in Q2, down from 19.4% in Q2 last year. The decrease in operating margin was primarily due to higher operating expenses as a percent of revenue, 30.2% in Q2 FY ’10 compared to 28.5% FY ’09. However, our long-term target model for ACG remains 18 to 20 points and it is terrific progress to operate in the target range at this level of revenue and in this still weak economic environment. Year-to-date we were at 18.2% operating margins for ACG despite revenues came down 27% from the first half last year. We believe we are well positioned to grow profits as revenue growths resumes in the future. Now I am going to turn to the audio entertainment group segment summary. AEG second quarter net revenues of $23 million and increase of $4 million from net revenues of $19 million in the prior quarter and represented a $1.5 million increase from a net revenues of $21.5 million compared to Q2 last year. AEG revenues for the quarter were above our expectations partly due to lower discounts, good execution on sales of what had been slow-moving products and acceptance of new products. AEG non-GAAP gross margin was 20.9% compared to 9% in the September quarter last year, primarily due to a more competitive product portfolio, lower discounts and lower requirements for excess and obsolete inventory provision. As a result of the revenue growth, gross margin improvements and lower OpEx in the year ago, the non-GAAP operating loss in the quarter was $941,000 down from $4.6 million a year ago and down from $2.6 million in the June quarter. As we announced last Friday, the Salix business is now expected to close on December 1st, given the decision of our Board to sell, the results of AEG will be reported as discontinued operations on a go-forward basis, historical results will also be restated to reflect AEG as discontinued operations, and what was ACG as continuing operations. On a consolidated basis below the operating income line, we had $0.9 million in other income in Q2 compared to $3.2 million in other expense in the year-ago quarter resulting from foreign currency gains of $0.5 million in Q2 this year compared to foreign currency losses of $4 million in Q2 last year. And some of that improvement in the FX results was offset in part by much lower interest income due to significant decline in interest rates. Our consolidated effect of non-GAAP tax rates for the quarter was 25.1% compared to 28.7% in the year-ago quarter. The 25.1% rate was necessary to bring our year-to-date rate down to 26.3% which is our updated estimate for our full-year rate, that also means that we expect a rate of approximately 26% for q3. On a GAAP basis, our Q2 tax rate was 85.4% compared to 26.9%, primarily due to the tax benefit on the domestic impairment charge of the long lived assets in the AEG’s segment, offset in part by foreign income tax at a lower rate. As a result of all the above, our Q2 consolidated non-GAAP net income was $20 million compared to $21.6 million in the year-ago quarter. These are excellent results given the lower revenue based on which they were achieved and represent a strong recovery from the $0.5 million in the March quarter and $17.5 million in the June quarter. On the balance sheet, our $269.2 million in cash, cash equivalents, and short-term investments is up from $218.2 million at the end of last year, and up $15.6 million from $253.6 million last quarter. Cash collections were strong, although DSO increased to 55 days from 48 days in the same quarter last year. The increase in the DSO was primarily due to the normal seasonality of revenues we experienced in this quarter. The quality of our aging was actually better than in the June quarter and better than a year ago as well. Due to our continuing effort to reduce inventory, inventories were down $8.9 million sequentially and inventory turns increased to 3.7 compared to 3.0 in the same quarter last year. Our strong profitability and inventory reductions help to generate approximately $15 million in cash flow from operations in the second quarter. At the outset of this fiscal year, we said we would cut CapEx by approximately 50% from fiscal ’09. In Q1 and Q2, capital spending was just $3 million, down from $14.6 million in the same period of prior year and depreciation and amortization expense was $10.2 million in the first six months of F ’10 compared to $14 million in the same period in FY ’09. We now expect full-year CapEx of $8.5 million to $9.5 million meaning that we will over-achieve our goals cutting CapEx by 50%. Given the strong increase in our cash position coupled with the fact that we have brought our cost structure in alignment with the current environment, and as we announced in May, we continue repurchases under the stock repurchase plan that our Board authorized last fall, repurchasing approximately 4 million in stocks during Q2. Of the $269.2 million and ending cash, cash equivalents and short-term investments, approximately $95 million of that was domestic, with the balance being international. The stock repurchases of $4 million and dividend payments of $2.5 million thus represent about 7% usage of the domestic cash during the quarter. Turning to the business outlook now, while the economic environment is still weak, we are encouraged by the relative stability of our OCC business, and in particular the resumption of normal seasonality of bookings during the September quarter, as well as the future pipeline of UC opportunities which continues to grow. We also believe that we will experience strong growth in our Bluetooth products on a sequential basis based on the placements we have as well as the order rates and customer forecast for December. Since we expect to complete the sale in December 2009 of what has essentially been our AEG segment and it will be reported as discontinued operations, our forecast for the December quarter is based solely on our expectations for the continuing operations of the business, which is what has been known as the ACG segment. So for continuing operations, we are expecting net revenues in the range of $155 million to $160 million with growth in our OCC and Bluetooth product lines as well as in our PC and entertainment products. Depending on the revenue mix and other factors, we believe non-GAAP operating income will be $26 million to $29 million compared to $9 million in the December quarter last year and compared to $26.8 million in the quarter just ended. That $26.8 million is for ACG. Please remember that the December quarter tends to have a much heavier consumer mix, which is lower gross margin revenue and that is certainly what we expect for the December quarter. We also currently expect non-GAAP EPS from continuing operations will be $0.38 to $0.42 on a 26% non-GAAP tax rate and for GAAP EPS to be $0.33 to $0.37. And with that, I am going to turn it over to Katina, the conference facilitator for the Q&A session.

(Operator instructions) Your first question comes from John Bright with Avondale Partners. John Bright – Avondale Partners: Thank you. Good afternoon, Ken, Barbara and Greg. Ken, in your prepared remarks, you mentioned 50 pilots previously on UC and 500 pilots now at the end of the quarter not planning to talk about looking forward. Can you talk about though what kind of conversion rate you are seeing or attach rate that you are seeing as well in those pilots?

Sure. I missed one part of your comment. So if I miss anything, just came back to me. But in general, we are finding that the pilots have uniformly moved forward, in other words, I am not aware of the situation where somebody tried to pilot and decided that they did not want to go ahead with Unified Communications. There are some that certainly were the timeline has moved out and there is not eminent adoption, but there are no cases that I am aware of where they have decided not to proceed. In terms of the impact for us, the different vendors create different adoption situations. We believe that of course in case of Microsoft where they are emphasizing a soft tone client. Generally speaking, we are seeing very high attach rates of headsets in their plant rollouts. There are cell phone as well as hard phone choices with Microsoft and we think that the hard phone options are going to be improved. And so going forward, it’s possible that that current adoption level that we are seeing will get diminished somewhat. But we still think it will be a substantial with in adoption over where it is today. In the case of Cisco, while theoretically, because there is a hard phone in almost all of their existing implementations, one would not expect a big increase in adoption. We are nonetheless seeing that there is some increase in adoption, partly because if you are out in a cube and you are using video or if you are using an increase in WebEx or some other application, people are using more headsets, so we do believe we are seeing some increase in adoption in those markets. Overtime, we think that both of those solutions, vendors will begin to converge a little bit more and that there will be more pure cell phone overtime, it may in future years with Cisco as well. John Bright – Avondale Partners: Do you care to put an attach rate that you are seeing right now? 50% I think it is in the company overview that you provided. Is that a fair rate conservative seeing at a higher rate right now?

While I think on Microsoft insulations, it’s actually proving to be conservative so far. But on Cisco, you are much closer to the existing attach rate that’s out there in the market. Although, I think it is in fact a little bit higher than that. But we don’t – we haven’t actually measured it on those specific accounts apples-to-apples with where they are before to know for sure how much lift we are getting. John Bright – Avondale Partners: Okay. During the quarter, it looked as though the consumer products outperformed, any visibility into sell-in versus sell through for these products? And then when I look at your guidance, I am going to assume that the typical seasonality that we had historically seen, consumer being stronger in the December quarter and OCC in the March quarter is likely to return. Is that fair?

Yes absolutely, we are expecting – maybe not a fully normal pickup from just given this – it’s still somewhat weak, but close to full pickup in the consumer products from September to December. And we do track inventory in the retail channels which is primarily where all the consumer products go as well as in the carrier channels and the weeks on hand look very, very normal, no indication of any strength in the September quarter it all caused by any increase in inventory.

I’ll make a couple of comments on the seasonality. One, as you know, this is a 53-week year for us and consequently it actually affects both the December quarter and the March quarter. It actually helps the December quarter which is incorporated into our projections, because the 13th week instead of being the Christmas and New Year’s week winds up being an earlier week essentially ending with Christmas. So we wind up getting a stronger week in this quarter. And of course the March quarter, although we are not projecting on it does windup with an extra week albeit it winds up with what is historically a very weak week, hopefully not confusing there in the period. In general, of course, we definitely expect some holiday lift as even given the recession in the December quarter, yet on the consumer side of the business. On the B2B side, we think that the traditional seasonality does appear to be applying to our business, we are comparing it not just to last year, but to prior years in the shapes of the curves do seem to indicate the traditional seasonality is taking place. We hope that by the March quarter, we will – we may see some improvement due to economic cycle and due to UC adoption, although we are not at this point in time, again making any forecast for the March quarter. John Bright – Avondale Partners: Barbara, one final question. In your prepared remarks, you mentioned expenses, how you had lowered expenses for a long challenging environment. Are these expense levels sustainable or is it something where we might see the need for a tick up given your increased confidence?

So I think a great deal of what we have done is in fact sustainable and they are also some items that were more temporary in nature and some of those temporary measures have been removed and will need to be eased going forward. At the beginning of the year we had talked about a $195 million expense level and that was for the company in total. About $175 million was for ACG and $20 million for AEG. And in the first half, we were operating at within $2 million of the $195 million level and more than a 100% of the overage was really just due to performance based comp, profit sharing for example being greater than we had planned. And if you just look at ACG now, I think for the full year, we will probably be awfully close to $180 million with the slope on that, so that the second half is probably closer to a $186 million run rate. It’s about maybe a 6% increase from what we are looking at and with a better profitability, better outlook for UC, the pipeline, we are starting to invest a bit incrementally more into UC than we had otherwise anticipated a year ago. John Bright – Avondale Partners: Thank you.

Thank you.

Your next question comes from Paul Coster with JPMorgan. Please go ahead. Paul Coster – JPMorgan: Yes, thank you. First of all, Barbara, I just want to state the obvious here the guidance you have issued excludes the AEG business obviously?

Right, yes. It’s just based on continuing operations. Paul Coster – JPMorgan: All right. Can you just tell us what the status of the outsourcing to China operations and restructuring, is it essentially done now or do we still have some tail activities to perform before the businesses – the operations are locked in the new form?

No, it’s really done. There are – if we – we might have less than a $100,000 of restructuring expense in Q3 leftover from that. But the transfer to Vortek is complete. The plant has stopped producing. And the – and therefore, we feel very much on track with hitting the target of 20% to 25% gross margins for Bluetooth. Paul Coster – JPMorgan: And is that an immediate realization or is it going to take a while for them to be achieved?

Well, we made progress from the first half of this year versus where we were and we are expecting that we can be in that range in the second half of this year, and really need to get there in the December quarter, I mean that’s a good quarter for consumer, and so that’s an important quarter to be in that range. Paul Coster – JPMorgan: Okay. And Ken, so $350 million kind of opportunity from UC, let me just make sure I understand this, because it’s not going to be distinguishable from the corded and wireless sales that currently make up OCC, is that correct?

Well, it’s kind of a grey line. Some of the products are clearly UC products. Having said that, I expect many organizations will buy UC products even if they are not using them for UC, because they will work with existing products and then your future proved against future needs, and therefore, it will be a very grey area to try to evaluate. Paul Coster – JPMorgan: Maybe I need to understand that better. You mean by that people are future proofing themselves while buying the savvy office headset unit?

Yes exactly. In other words, you can use a savvy office with your existing telephony solution without using anything else. Of course, you can also use it with your existing PC for non-UC applications such as listening to e-training or whatever else you might want to do. Having said that, if you go to UC, it will work on those applications as well. So if you are an IT guy, if you are saying what should I buy right now, well rather than buy something that won’t have a future use of life if I might go to UC, I might as well buy the platform to make the future proof. That in turn makes you hard for us to kind of say, this is UC revenue and we can see it is UC product, but it’s much harder to say this is UC revenue. Paul Coster – JPMorgan: So they might just as well be standard corded or wireless product being sold into the UC space meaning someone is just plugging a three millimeter jack into the side a laptop, isn’t that correct?

Well, not really, because on the one hand, you could do that. But on the other hand, you would not have the cost control functionality in many of the other features that are what you are trying to achieve with Unified Communications. Paul Coster – JPMorgan: So basically what this means is that there is a higher selling price – there is a higher value per desk with UC than with the conventional carpeted office desktop, is that correct?

There is a higher value for a given usage. I just want to make one comment that goes to the contrary just to make sure you understand that. Some of our adoption, I mean let’s put it this way, if you have been in my shoes Paul, what you’ve been trying to do is sell more people to use headsets. And if you are on a phone a great deal, if you had some long calls, we had a pretty good value proposition, keep your hands-free, be more comfortable, be more productive. And by the way, we give you wireless mobility. But if on the other hand, you were somebody who's on the phone five minutes a week, it is very hard to sell you a headset. Now, if you are an IT manager and you are now providing people with headsets because they need some audio I/O that’s private and it doesn’t create noise pollution out in cubes or in open plant, and that person is only using it five minutes per day, you are not going to buy the top end of our line, you are going to buy a lower price corded-type products. So a fair chunk of this incremental volume will come at the low end of our product line. Paul Coster – JPMorgan: Got it. What is a pilot? How do you define a pilot?

Well, we don’t really define it, and that’s one of the issues on why I don’t really want to communicate it on an ongoing basis. Each company, each IT organization really sets their own terms as to what they consider to be a pilot, and those are highly variable depending upon the organization and the way they conduct things. In general what it means is that in an isolated environment, they are trialing new software, they are trialing new hardware that works with that software just to prove out the functionality of the products with their systems and their business processes. Paul Coster – JPMorgan: Are you actually selling the products at normal price or are you kind of giving the stuff away. In other words, are we seeing an artificial negative impact on gross margins during this pilot period?

Generally speaking, we are selling the product. However, in some cases, UC vendors are providing hardware product for free to those pilot accounts as they are trialing the software in those solutions. Paul Coster – JPMorgan: But it doesn’t have –

Anything that’s a purely a sample, Paul, if it’s purely a sample that goes through our SG&A line. Paul Coster – JPMorgan: Okay. I mean is it artificially high at the moment?

No. Paul Coster – JPMorgan: Okay, good. And so I am just trying to understand when you transition from a pilot to implementation, are we talking about moving from half a dozen people to tens of thousands or from hundreds of people to tens of thousands. What’s the – I am just trying to get –

Yes, so the pilots really vary, and that’s again one of the points I was trying to make. I mean some of them have been quite largely pilots, I would say up to 500 to a 1000 people. More of them are more in that, what’s called 50 to 100 types of range and again variable in terms of time. In terms of rollout, most organizations are not trying to do this across I mean most of these large companies which were in the early phases are not trying to do it across the whole company right away, because it’s just a massive logistics, training, everything, implantation. So I would say that these are being spaced out over a period of six months to two years in terms of these rollouts. Paul Coster – JPMorgan: Well then, thank you so much. Sounds exciting.

Thanks.

Your next question comes from Rohit Chopra with Wedbush Securities. Please go ahead. Rohit Chopra – Wedbush Securities: Thank you very much. I just wanted to clarify something Barbara that you mentioned. On the cost reduction efforts, do you think we’re already there, is that what you meant and they may increase a little bit as we go through the reminder of the year?

Yes, there is two types of cost reductions I talked about and I think you are referring to the one on Bluetooth. And yes, we finished all the activities that we need to do to achieve that gross margins during Q2 and that doesn’t mean that we have got all the way to the margin level in Q2, because it was a transition period with those activities are behind us, and we should be on track therefore to achieve the 20% to 25% in the second half of this fiscal year. Rohit Chopra – Wedbush Securities: And then I wanted to ask both of you this question. Since we are generally at the gross margin levels and the operating margin levels, there is a – I guess it kind of implies that there is potential for margin improvement as we go through the rest of the year, this is where we are already. Do you let the margins improve or do you reinvest some of the incremental leverage that you get out of the business?

So our target range is 18% to 20% and we just have crossed through and little over the bottom end of that. So we knew and try to plan the business to operate at those levels. Not every quarter is going to be necessarily exactly in there. But if that’s the range in which we intend to operate, so it allows for incremental investment on revenue growth, and if need to plan for a flatter environment, it enables us to likely stay in that range at current levels. Rohit Chopra – Wedbush Securities: Okay. And then last question, given that additional resources are not going to be put in to AEG, where are you guys redirecting some of the resources, what new products should we be looking for let’s just say in the new calendar year?

Well, I just want to be clear. We are not – it’s not that we are re-directing resources from AEG to ACG. We think that we are – I mean from a financial standpoint, we’ve operated each businesses with their own P&L management structure. Now from a – it’s true that we have done a reorganization that we think will allows us to further optimize our investments on Unified Communications and we definitely shifted some resources towards Unified Communications where we expected better return on investment than in other areas of our total business, so that’s the bigger shift. There are certain areas where we think we will get more bank for the buck with our new organizational structure, but really what we are trying to do is just see what are the best opportunities for us to invest within Unified Communications as this market gets real, we are seeing more opportunities for those investments in the same time, we don’t think there is a reason that we can’t grow in profitability and pace with that expense growth and deliver a kind of a responsible business. Rohit Chopra – Wedbush Securities: Thanks Ken. Thanks Barbara.

Thank you.

Your next question comes from Reik Read with Robert Baird & Company. Please go ahead. Reik Read – Robert Baird & Company: Thank you, good afternoon. Just with respect to your primary competitor out there, you have had a relatively recent change in leadership at both the CEO and the Head of Sales, and just want to see if there has really been any change in the marketplace as a result of those changes at that player?

Well, I am sure there has. We hear good things about those individuals. Having said that, we have not yet seen anything that we are able to discern in the marketplace in terms of the different approach. Reik Read – Robert Baird & Company: Okay, no pricing or anything like that is going to change?

No, again – there is always pricing things, but I don’t notice a pattern of change relative to the prior periods. Reik Read – Robert Baird & Company: Okay, fair enough. And then, Ken last quarter, you had talked about – you guys, your language was consistent in terms of seeing stability but you kind of highlighted healthcare and government as two areas that really showed some strength. Is that still the case or has that expanded into other areas?

Well I think that is still the case, and government perhaps particularly let me say. But having said that, the – I guess what I would highlight on this quarter if anything is more than geographic basis, well what we have seen is the growth in some of the emerging markets are really resumed as they have achieved positive GDP and really weathered this storm quite well in the stabilization in the US, which again I think is fairly broad. And then Europe, clearly was hit in the last quarter. Although we think that’s stabilized at this point in time, so would say that rather than looking at the verticals, the geographic snapshot was probably more telling. Reik Read – Robert Baird & Company: Okay. And then I just wanted to follow up on previous comment you had made to another question, Ken is that you talked about financially that the two businesses have been run as separate units. Does that mean that as Altec goes away that it really comes apart in a clean break or are there any administrative capacity that would see or manufacturing capacity would see a reduction in leverage as a result of that business going away?

There are a few touch points where we have gained efficiency from Altec and where we will be hurt a little bit, those primarily include the consumer markets that were facing to the consumer electronics type of channels where we had a consolidated position and that gave us a little bit better strength in sales as well as marketing is particularly true in Europe, where we have a little less critical mass where Altec and it certainly was in a position to begin helping us. We had already pretty much realized that benefit in the US in this point in time that that was largely passed from an operation standpoint. On the one hand, the worse and comingled activities, on the other hand, the amount of operating leverage there is pretty much and in production it really wasn’t existing. So I don’t think it’s going to be a significant impact overall there. Reik Read – Robert Baird & Company: Okay, great. I appreciate the comments. Thank you.

Your next question comes from Tavis McCourt with Morgan Keegan. Please go ahead with your question. Tavis McCourt – Morgan Keegan: Thanks Ken and Barbara for taking my question. Barbara, a couple of housekeeping items first. What was the cash flow from operations in the quarter?

It was $15 million. Tavis McCourt – Morgan Keegan: Okay. And the 26% rate for next quarter, is that something that should be reasonably stable at that level or now that it’s just going to be ACG or will that still sales around a bit?

That’s actually our estimate. That’s a good question. It is actually our estimate for the full year assuming the sale of Altec. So that should be the rate for Q3 and Q4 as well unless something else changes in the ACG business. Tavis McCourt – Morgan Keegan: And – but if you are operating just ACG like for next year, does that go – because I think you used operators slightly higher tax rate when you were – before you had bought Altec, if I remember correctly. But I don’t know if there was a geographical shift since that would lower that?

I am not updating or kind of projecting the long-term rate right now. But for this year, 26 and whether it’s flat or maybe slightly higher I will cycle back on that with all of you next quarter. Tavis McCourt – Morgan Keegan: Okay. And then what was the mix this quarter within OCC between the office wireless and the – in the corded products?

We are not – we mentioned last quarter that we were going to stop providing that information and so consistently we haven’t, just announced that we do want to stick with it. Part of the reason is that we don’t feel at this point in time that it’s going to be as indicative of growth in the margins on both of those businesses we are converging in any event, so at this point in time, we are not intending to provide that. Tavis McCourt – Morgan Keegan: Okay. And Ken the organizational restructure or the reorganization you talked about what does that exactly do? I mean does it allow you to lower costs at all, or does it just allow you to scale of business better or just focus on UC better? What is the real benefit of that, and if you are moving from a matrix structure, what are you moving towards?

Yes just to be clear. We had kind of separated out the two different products groups towards consumer and towards business, and there were some benefits to doing that in terms of the different cycles and the different types of requirements and processes that each had. Having said that, what we are trying to do is we are trying to win in Unified Communications. We are trying to understand the customer need in the market requirement. And in Unified Communications, in the office, people are using Bluetooth headsets for their local professionals, they are using PC headsets, they are using traditional office headsets, they have remote workers that are working at home that are really part of that corporate infrastructure. And so we were trying to make sure that all of our solutions are optimized towards that set of requirements. And so having separate business units for example in the consumer business, actually the business customers are fairly portion of that, and so we want – we didn’t want to sub-optimize the single most important opportunity we had by focusing on a business structure where that need might be of a minority of that particular business’s requirements. We want to make sure that we were well aligned, we didn’t want to have the different business units have to spend time collaborating to figure out how they were going to solve a problem. We just wanted to have a simplified structure and command where we could say, Unified Communications is the number one target, we can make those decisions more quickly, we can execute more rapidly. This was not primarily about cost saving, this is about doing the things we do more efficiently for the most important opportunities. Tavis McCourt – Morgan Keegan: Okay. And then a couple of UC questions. First, in terms of – if you look at your competitors in for headsets and UC right now and it sounds like Microsoft’s kind of the biggest near-term opportunity, if I refer company that’s now moving to Microsoft OCS and want a headset solution for 50% of my workforce, is Plantronics the only choice as of today or are there are existing competitors in the market?

Well we certainly think Plantronics is the best choice for them. I am sorry to tell you that we are not the only choice, but again we do think by far that we are the best choice. Tavis McCourt – Morgan Keegan: And then you made a comment before about not being able to simply plug headset into a USB and simply making it work because they were various things like call control that you needed on the headset. What exactly are you referring to there?

The UC software guides how the calls are answered, how they are transferred, it guides the signaling. And so if you don’t have within the headset the necessary numeration, if you don’t have the right drivers and the right interface within the headset, then it won’t operate with the software. It doesn’t mean you couldn’t have audio I/O, because you could have audio I/O, but you don’t have the kind of easy solution and the productivity and benefit which is the heart and the goal of what Unified Communication is trying to provide. It’s trying to provide really easy interface, a really complete solution, so that I can really move easily from what mode of communications whenever I can see, who’s available, who is not. And so in terms of the whole spirit and the functionality what you are trying to achieve, if you use products that aren’t operating with those systems, you are undermining the goal that people have. Tavis McCourt – Morgan Keegan: Okay. Fair enough. I think that’s all I have. Thanks.

(Operator instructions) Ladies and gentlemen, there are no further questions at this time. Do you have any closing comments?

Thanks very much, Katina. And I would just like to thank all of you for attending our conference call. If you have any further questions, we are available by phone. Appreciate it very much.

Thank you for participating in today’s conference. You may now disconnect.