Six-Month Periods Ended
               Net sales:    October 2, 2009       September 26, 2008
               China        $       3,903,051     $          5,457,113
               Mexico               1,710,089                1,744,761
               U.S                  1,730,836                2,556,196
               Malaysia             1,088,084                2,584,433
               Hungary                717,271                  726,932
               Other                2,465,109                4,143,327

                            $      11,614,440     $         17,212,762

                                             As of                As of
        Property and equipment, net:    October 2, 2009       March 31, 2009
        China                          $         918,782     $      1,001,832
        Mexico                                   348,653              342,662
        U.S                                      182,969              187,108
        Hungary                                  163,644              178,251
        Malaysia                                 106,510              127,927
        Other                                    460,112              496,001

                                       $       2,180,670     $      2,333,781

We believe that the combination of our extensive design and engineering services, significant scale and global presence, vertically-integrated end-to-end services, advanced supply chain management, industrial campuses in low-cost geographic areas and operational track record provide us with a competitive advantage in the market for designing, manufacturing and servicing electronics products for leading multinational OEMs. Through these services and facilities, we simplify the global product development and manufacturing process and provide meaningful time to market and cost savings for our OEM customers. Our operating results are affected by a number of factors, including the following:
• changes in the macroeconomic environment and related changes in consumer demand;

• our exposure to financially troubled customers;

• the effects on our business when our customers are not successful in marketing their products, when their products do not gain widespread commercial acceptance, as well as the effects on our business due to our customers' products having short product life cycles;

• our customers' ability to cancel or delay orders or change production quantities;

• integration of acquired businesses and facilities;

• the mix of the manufacturing services we are providing, the number and size of new manufacturing programs, the degree to which we utilize our manufacturing capacity, seasonal demand, shortages of components and other factors;

• our increased design services and components offerings, which at times has reduced our profitability as we are required to make substantial investments in the resources necessary to design and develop these products without cost recovery and margin generation; and

• our ability to achieve commercially viable production yields and to manufacture components in commercial quantities to the performance specifications demanded by our OEM customers.

Historically, the EMS industry experienced significant change and growth as an increasing number of companies elected to outsource some or all of their design, manufacturing, and distribution requirements. Following the 2001 - 2002 technology downturn, and until the current macroeconomic downturn, we saw an overall increase in penetration of global OEM manufacturing requirements as more and more OEMs pursued the benefits of outsourcing rather than internal manufacturing. As a result of recent macroeconomic conditions, the global economic crisis and related decline in demand for our customers' products, many of our OEM customers have reduced their manufacturing and supply chain outsourcing, which has negatively impacted our capacity utilization levels and thus the overall profitability of the Company. In response, we announced in March 2009 restructuring plans intended to rationalize our global manufacturing capacity and infrastructure with the intent to improve our operational efficiencies by reducing excess workforce and capacity. We have recognized approximately $228.0 million of associated charges since the announcement, with approximately $12.6 million and $77.4 million recognized during the three-month and six-month periods ended October 2, 2009. We estimate approximately $22.0 million of restructuring related charges associated with these actions remain.

We are focused on managing the controllable aspects of business during this economic downturn; and have and will continue to seek ways to control and reduce costs to minimize the macroeconomic impact on our profitability, while continuing to attract new customer business.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES We believe the accounting policies discussed under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2009, affect our more significant judgments and estimates used in the preparation of the Condensed Consolidated Financial Statements. Recent Accounting Pronouncements
Information regarding recent accounting pronouncements is provided in Note 2, "Summary of Accounting Policies" of the Notes to Condensed Consolidated Financial Statements.

RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain statements of
operations data expressed as a percentage of net sales. The financial
information and the discussion below should be read in conjunction with the
Condensed Consolidated Financial Statements and notes thereto included in this
document. In addition, reference should be made to our audited Consolidated
Financial Statements and notes thereto and related Management's Discussion and
Analysis of Financial Condition and Results of Operations included in our 2009
Annual Report on Form 10-K.

                                           Three-Month Periods Ended                 Six-Month Periods Ended
                                        October 2,         September 26,       October 2,           September 26,
                                           2009                2008               2009                  2008
Net sales                                     100.0 %               100.0 %          100.0 %                 100.0 %
Cost of sales                                  94.7                  95.3             94.9                    94.7
Restructuring charges                           0.2                     -              0.6                     0.2

Gross profit                                    5.1                   4.7              4.5                     5.1
Selling, general and administrative
expenses                                        3.0                   2.9              3.3                     2.9
Intangible amortization                         0.4                   0.6              0.4                     0.4
Restructuring charges                             -                     -              0.1                       -
Other charges, net                              1.6                   0.1              1.7                     0.1
Interest and other expense, net                 0.6                   0.7              0.6                     0.7

Income (loss) before income taxes              (0.5 )                 0.4             (1.6 )                   1.0
Provision for (benefit from) income
taxes                                          (0.8 )                 0.1             (0.4 )                   0.1

Net income                                      0.3 %                 0.3 %           (1.2 )%                  0.9 %

Net sales
Net sales during the three-month period ended October 2, 2009 totaled $5.8 billion, representing a decrease of $3.1 billion, or 35%, from $8.9 billion during the three-month period ended September 26, 2008, primarily due to reduced customer demand as a result of the weakened macroeconomic environment. Sales decreased across all of the markets we serve, consisting of: (i) $1.2 billion in the infrastructure market, (ii) $738.3 million in the mobile communications market, (iii) $504.9 million in the consumer digital market, (iv) $330.4 million in the computing market and (v) $300.8 million in the industrial, medical, automotive and other markets. Net sales also decreased across all of the geographic regions we serve including $1.7 billion in Asia, $950.1 million in the Americas, and $401.5 million in Europe.
Net sales during the six-month period ended October 2, 2009 totaled $11.6 billion, representing a decrease of $5.6 billion, or 33%, from $17.2 billion during the six-month period ended September 26, 2008, primarily due to reduced customer demand as a result of the weakened macroeconomic environment. Sales decreased across all of the markets we serve, consisting of:
(i) $2.2 billion in the infrastructure market, (ii) $1.1 billion in the mobile communications market, (iii) $824.7 million in the industrial, medical, automotive and other markets, (iv) $755.4 million in the consumer digital market, and (v) $656.7 million in the computing market. Net sales during the six-month period ended October 2, 2009 decreased across all of the geographic regions we serve including $3.3 billion in Asia, $1.8 billion in the Americas, and $540.2 million in Europe.

Our ten largest customers during the three-month and six-month periods ended October 2, 2009 accounted for approximately 47% of net sales in each period, respectively, with no customer accounting for greater than 10% of our net sales during either period. Our ten largest customers during the three-month and six-month periods ended September 26, 2008 accounted for approximately 53% and 54% of net sales, respectively, with Sony-Ericsson accounting for greater than 10% of our net sales for both periods.
Gross profit
Gross profit is affected by a number of factors, including the number and size of new manufacturing programs, product mix, component costs and availability, product life cycles, unit volumes, pricing, competition, new product introductions, capacity utilization and the expansion and consolidation of manufacturing facilities. Gross profit during the three-month period ended October 2, 2009 decreased $117.9 million to $299.6 million, or 5.1% of net sales, from $417.5 million, or 4.7% of net sales, during the three-month period ended September 26, 2008. The 40 basis point period-over-period increase in gross margin was primarily attributable to a $96.7 million charge recognized in the fiscal 2009 second quarter for the write-down of inventory and related contractual obligations associated with customers that were experiencing significant financial difficulty, partially offset by lower capacity utilization as a result of recent macroeconomic conditions and related decline in customer demand, net of cost reduction benefits from our recent restructuring activities. Gross profit during the six-month period ended October 2, 2009 decreased $350.6 million to $523.6 million, or 4.5% of net sales, from $874.2 million, or 5.1% of net sales, during the six-month period ended September 26, 2008. The 60 basis point period-over-period decrease in gross margin was primarily the result of lower capacity utilization in the current period as a result of current macroeconomic conditions and related decline in customer demand. In addition, we recognized an approximate 40 basis point increase in restructuring charges in the current period as compared with the year ago period. The factors contributing to the decrease in gross margin during fiscal 2010 were offset by a $96.7 million, or approximately 60 basis point, charge in the fiscal 2009 period for the write-down of inventory and related contractual obligations associated with customers that were experiencing significant financial difficulty. Restructuring charges
We recognized restructuring charges of approximately $12.6 million and $77.4 million during the three-month and six-month periods ended October 2, 2009. Restructuring charges incurred during the three-month and six-month periods ended October 2, 2009 were primarily related to rationalizing the Company's global manufacturing capacity and infrastructure as a result of the current macroeconomic conditions. This global recession and related decline in demand for our customers' products across all of the industries the Company serves, has caused our OEM customers to reduce their manufacturing and supply chain outsourcing and has negatively impacted the Company's capacity utilization levels. Our restructuring activities are intended to improve the Company's operational efficiencies by reducing excess workforce and capacity. The costs associated with these restructuring activities included employee severance, costs related to owned and leased facilities and equipment that is no longer in use and is to be disposed of, and other costs associated with the exit of certain contractual arrangements due to facility closures. We classified approximately $12.4 million and $64.5 million of the charges as a component of cost of sales during the three-month and six-month periods ended October 2, 2009. The charges recognized by reportable geographic region during the six-month period ended October 2, 2009 amounted to $36.0 million, $16.6 million and $24.8 million for Asia, the Americas and Europe, respectively. Approximately $35.5 million of the charges were non-cash, for the write-down of property and equipment, which is no longer in use, to management's estimate of fair value, for the six-month period ended October 2, 2009. As of October 2, 2009, accrued costs related to restructuring charges incurred during the six-month period ended October 2, 2009 were approximately $12.2 million, all of which were classified as a short-term obligation.
We recognized $29.2 million of restructuring charges during the six-month period ended September 26, 2008. Restructuring charges were due to the Company realigning workforce and capacity.

Refer to Note 9, "Restructuring Charges," of the Notes to Condensed Consolidated Financial Statements for further discussion of our restructuring activities. Selling, general and administrative expenses Selling, general and administrative expenses, or SG&A, amounted to $176.2 million, or 3.0% of net sales, during the three-month period ended October 2, 2009, compared to $258.7 million, or 2.9% of net sales, during the three-month period ended September 26, 2008. The decrease in SG&A expense during the three-month period ended October 2, 2009 was primarily the result of our restructuring activities and discretionary cost reduction actions. The increase in SG&A as a percentage of net sales during the three-month period ended October 2, 2009, was primarily attributable to the rapid and significant decline in sales, which exceeded our ability to reduce costs in the short-term. Selling, general and administrative expenses, or SG&A, amounted to $377.9 million, or 3.3% of net sales, during the six-month period ended October 2, 2009, compared to $507.3 million, or 2.9% of net sales, during the six-month period ended September 26, 2008. The decrease in SG&A expense during the six-month period ended October 2, 2009 was primarily the result of our restructuring activities and discretionary cost reduction actions. The increase in SG&A as a percentage of net sales during the six-month period ended October 2, 2009, was primarily attributable to the rapid and significant decline in sales, which exceeded our ability to reduce costs in the short-term. Intangible amortization
Amortization of intangible assets during the three-month period ended October 2, 2009 decreased by $27.6 million to $22.7 million from $50.3 million during the three-month period ended September 26, 2008, primarily due to the Company's use of the accelerated method of amortization for certain customer related intangibles, which results in decreasing expense over time.
Amortization of intangible assets during the six-month period ended October 2, 2009 decreased by $29.6 million to $46.0 million from $75.6 million during the six-month period ended September 26, 2008. The reduction in expense during the six-month period ended October 2, 2009 was primarily due to the use of the accelerated method of amortization for certain customer related intangibles, which results in decreasing expense over time. Other charges, net
During the second quarter of fiscal year 2010, we recognized charges totaling approximately $92.0 million associated with the impairment of notes receivable from one affiliate and an equity investment in another affiliate. The notes receivable were partially impaired during the fourth quarter of fiscal year 2009 based on discussions with a third party for the potential sale of the notes and the related expected recoverable value. Subsequent deterioration in the affiliate's business prospects, cash flow expectations, and increased liquidity concerns has resulted in an additional impairment. Similarly, deterioration in the business prospects and liquidity concerns of the equity investment occurring in the six-month period ended October 2, 2009 has resulted in an impairment of the carrying value to the estimated recoverable value.
In August 2009, we sold one of our non-majority owned investments and related note receivable for approximately $252.5 million, net of closing costs. In conjunction with this transaction we recognized an impairment charge of approximately $107.4 million in the three-month period ended July 3, 2009. Total impairment charges related to our equity investments and notes receivable for the six-month period ended October 2, 2009 were approximately $199.4 million. During the three-month and six-month periods ended September 26, 2008, we recognized $11.9 million in charges for other-than-temporary impairment of certain of our investments primarily associated with a customer that was experiencing significant financial and liquidity difficulties. Interest and other expense, net
On April 1, 2009, the Company adopted a new accounting standard related to accounting for convertible debt instruments that may be settled in cash upon conversion. The adoption of the new standard affected the accounting for the Company's 1% Convertible Subordinated Notes and Zero Coupon Convertible Junior Subordinated Notes (collectively referred to as the "Convertible Notes") by requiring the initial proceeds from their sale to be allocated between a liability component and an equity component in a manner that results in interest expense on the debt component at the Company's nonconvertible debt borrowing rate on the date of issuance. The standard required the Company to record the change in accounting principle retrospectively to all periods presented. As a result of the adoption of this standard, we recognized approximately $5.5 million and $13.5 million in incremental non-cash interest expense during the three-month and six-month periods ended October 2, 2009. In addition, we retrospectively adjusted interest and other expense, net for the three-month and six-month periods ended September 26, 2008 to include $11.4 million and $22.5 million of incremental non-cash interest expense.

Interest and other expense, net was $38.1 million during the three-month period ended October 2, 2009 compared to $59.4 million (as restated for the retrospective application of the new accounting standard) during the three-month period ended September 26, 2008, a decrease of $21.3 million. The decrease in expense is primarily the result of less debt outstanding during the period including the approximate $200.0 million aggregate principal reduction in the 6 1/2% Senior Subordinated Notes and the 6 1/4% Senior Subordinated Notes. Further reduction in interest expense was due to, lower interest rates on our variable rate debt and a decrease in non-cash interest expense due to our repurchase of $260.0 million of principal value of our 1% Convertible Subordinated Notes in December 2008 and redemption of our Zero Coupon Convertible Junior Subordinated Notes in July 2009, partially offset by less interest income resulting from the reduction in other notes receivable that were sold during the second quarter of fiscal year 2010.
Interest and other expense, net was $75.0 million during the six-month period ended October 2, 2009 compared to $110.1 million (as restated for the retrospective application of the new accounting standard) during the six-month period ended September 26, 2008, a decrease of $35.1 million. The decrease in expense is primarily the result of less debt outstanding during the period including the approximate $200.0 million aggregate principal reduction in the 6 1/2% Senior Subordinated Notes and the 6 1/4% Senior Subordinated Notes. Further reduction in interest expense was due to lower interest rates on our variable rate debt and a decrease in non-cash interest expense due to our repurchase of $260.0 million of principal value of our 1% Convertible Subordinated Notes in December 2008 and redemption of our Zero Coupon Convertible Junior Subordinated Notes in July 2009, partially offset by less interest income resulting from the reduction in other notes receivable that were sold during the second quarter of fiscal year 2010.
Income taxes
Certain of our subsidiaries have, at various times, been granted tax relief in their respective countries, resulting in lower income taxes than would otherwise be the case under ordinary tax rates. Refer to Note 8, "Income Taxes," of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2009 for further discussion.
The Company has tax loss carryforwards attributable to continuing operations for which we have recognized deferred tax assets. Our policy is to provide a reserve against those deferred tax assets that in management's estimate are not more likely than not to be realized. During the six-month period ended October 2, 2009, the provision for income taxes includes a benefit of approximately $75.2 million for the net change in the liability for unrecognized tax benefits as a result of settlements in various tax jurisdictions. During the six-month period ended September 26, 2008, the provision for income taxes includes a benefit of approximately $38.5 million for the reversal of a valuation allowance.
The consolidated effective tax rate for a particular period varies depending on the amount of earnings from different jurisdictions, operating loss carryforwards, income tax credits, changes in previously established valuation allowances for deferred tax assets based upon our current analysis of the realizability of these deferred tax assets, as well as certain tax holidays and incentives granted to our subsidiaries primarily in China, Malaysia, Israel, Poland and Singapore.
LIQUIDITY AND CAPITAL RESOURCES
As of October 2, 2009, we had cash and cash equivalents of approximately $2.0 billion and bank and other borrowings of approximately $2.6 billion. We also had a $2.0 billion credit facility, under which we had no borrowings outstanding as of October 2, 2009. As of October 2, 2009, we were in compliance with the covenants under the Company's indentures and credit facilities. Cash provided by operating activities amounted to $418.4 million during the six-month period ended October 2, 2009. The Company's $134.4 million net loss for the period included approximately $466.5 million of non-cash expenses for depreciation, amortization, and impairment charges. The remaining increase of approximately $86.3 million in cash from operations was driven from fluctuations in net working capital and primarily driven by a reduction in inventory.

Cash provided by investing activities amounted to $116.1 million. This resulted . . .