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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|- | ------------------------------------------------------------------

EXCHANGE ACT OF 1934

For the quarter ended June 30, 2011

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
|- | -------------------------------------------------------------------

EXCHANGE ACT OF 1934

For the Transition Period from            to

Commission File Number: 0-29174

LOGITECH INTERNATIONAL S.A.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Canton of Vaud, Switzerland                                    |  | None                                
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

Logitech International S.A.

Apples, Switzerland

c/o Logitech Inc.

6505 Kaiser Drive

Fremont, California 94555

(Address of principal executive offices and zip
code)

(510) 795-8500

(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.                                        
Yes  x     No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).                    Yes  x     No   ̈

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.



|                                                                       |  |                            
|---------------------------------------------------------------------- |  | ---------------------------
|Large accelerated filer  x                                             |  | Accelerated filer   ̈       
|                                                                       | 
|Non-accelerated filer  ̈ (Do not check if a 
smaller reporting
company) |  | Smaller reporting company  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Act).

Yes   ̈    No  x

As of August 4, 2011, there were 180,253,328 shares of the Registrants share capital outstanding.



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TABLE OF CONTENTS



|           |  |                                                                                       |    |      |    | 
|---------- |  | ------------------------------------------------------------------------------------- | -- | ---- | -- | 
|           |  |                                                                                       |    | Page |   
|Part I     |  | FINANCIAL INFORMATION                                                                 |    |      |    | 
|           |  |                                                                                      
|Item 1.    |  | Consolidated Financial Statements (Unaudited)                                         |    |      | 3  | 
|           |  |                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |    |      | 27 | 
|           |  |                                                                                      
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |    |      | 45 | 
|           |  |                                                                                      
|Item 4.    |  | Controls and Procedures                                                               |    |      | 48 | 
|           |  |                                                                                      
|Part II    |  | OTHER INFORMATION                                                                     |    |      |    | 
|           |  |                                                                                      
|Item 1.    |  | Legal Proceedings                                                                     |    |      | 49 | 
|           |  |                                                                                      
|Item 1A.   |  | Risk Factors                                                                          |    |      | 49 | 
|           |  |                                                                                      
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |    |      | 57 | 
|           |  |                                                                                      
|Item 6.    |  | Exhibit Index                                                                         |    |      | 58 | 
|           | 
|Signatures |  |                                                                                       | 59 |     
|           | 
|Exhibits   |  |                                                                                       |    |     

In this document, unless otherwise indicated, references to the Company or
Logitech are to Logitech International S.A., its consolidated subsidiaries and predecessor entities. Unless otherwise specified, all references to U.S. dollar, dollar or $ are to the United States dollar, the legal currency of the United
States of America. All references to CHF are to the Swiss franc, the legal currency of Switzerland.

Logitech,
the Logitech logo, and the Logitech products referred to herein are either the trademarks or the registered trademarks of Logitech. All other trademarks are the property of their respective owners.



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PART I  FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



|                                                                                                                     |  |  |      | 
|-------------------------------------------------------------------------------------------------------------------- |  |  | ---- | 
|Financial Statement Description                                                                                      |  |  | Page | 
|                                                                                                                     | 
|      
Consolidated Statements of Operations for the three months ended June 30, 2011 and 2010                      |  |  | 4    | 
|                                                                                                                     | 
|      
Consolidated Balance Sheets as of June 30, 2011 and March 31, 2011                                           |  |  | 5    | 
|                                                                                                                     | 
|      
Consolidated Statements of Cash Flows for the three months ended June 30, 2011 and 2010                      |  |  | 6    | 
|                                                                                                                     | 
|      
Consolidated Statements of Changes in Shareholders Equity for the three months ended June 30, 2011 and 2010 |  |  | 7    | 
|                                                                                                                     | 
|      Notes to Consolidated Financial Statements                                                                    |  |  | 8    | 



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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)



|                                                    |  |                            |          |  |      |   |         | 
|--------------------------------------------------- |  | -------------------------- | -------- |  | ---- | - | ------- | 
|                                                    |  | Three months
endedJune 30, |         
|                                                    |  | 2011                       |          |  | 2010 |  
|                                                    |  | (Unaudited)                |         
|                                                    |  |                           
|Net sales                                           |  | $                          | 480,441  |  |      | $ | 479,330 | 
|Cost of goods sold                                  |  |                            | 354,834  |  |      |   | 310,301 | 
|                                                    |  |                            |          |  |      |   |         | 
|Gross profit                                        |  |                            | 125,607  |  |      |   | 169,029 | 
|Operating expenses:                                 |  |                            |          |  |      |   |         | 
|Marketing and selling                               |  |                            | 99,793   |  |      |   | 91,477  | 
|Research and development                            |  |                            | 39,981   |  |      |   | 38,389  | 
|General and administrative                          |  |                            | 30,865   |  |      |   | 27,360  | 
|                                                    |  |                            |          |  |      |   |         | 
|Total operating expenses                            |  |                            | 170,639  |  |      |   | 157,226 | 
|Operating income (loss)                             |  |                            | (45,032) |  |      |   | 11,803  | 
|Interest income, net                                |  |                            | 690      |  |      |   | 521     | 
|Other income, net                                   |  |                            | 5,191    |  |      |   | 1,796   | 
|                                                    |  |                            |          |  |      |   |         | 
|Income (loss) before income taxes                   |  |                            | (39,151) |  |      |   | 14,120  | 
|Benefit from income taxes                           |  |                            | (9,545)  |  |      |   | (5,402) | 
|                                                    |  |                            |          |  |      |   |         | 
|                                                    |  |                           
|Net income (loss)                                   |  | $                          | (29,606) |  |      | $ | 19,522  | 
|                                                    |  |                            |          |  |      |   |         | 
|                                                    |  |                           
|Net income (loss) per share:                        |  |                            |          |  |      |   |         | 
|Basic                                               |  | $                          | (0.17)   |  |      | $ | 0.11    | 
|Diluted                                             |  | $                          | (0.17)   |  |      | $ | 0.11    | 
|                                                    |  |                           
|Shares used to compute net income (loss) per share: |  |                            |          |  |      |   |         | 
|Basic                                               |  |                            | 179,331  |  |      |   | 175,492 | 
|Diluted                                             |  |                            | 179,331  |  |      |   | 177,358 | 





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



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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)



|                                                                                                                                 |  |              |           |  |                      |   |           | 
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- |  | -------------------- | - | --------- | 
|                                                                                                                                 |  | June 30,2011 |           |  | March 31,      
2011 |  
|                                                                                                                                 |  | (Unaudited)  |           |  |                      |  
|ASSETS                                                                                                                           | 
|Current assets:                                                                                                                  |  |              |           |  |                      |   |           | 
|Cash and cash equivalents                                                                                                        |  | $            | 476,367   |  |                      | $ | 477,931   | 
|Accounts receivable                                                                                                              |  |              | 241,456   |  |                      |   | 258,294   | 
|Inventories                                                                                                                      |  |              | 317,548   |  |                      |   | 280,814   | 
|Other current assets                                                                                                             |  |              | 90,117    |  |                      |   | 59,347    | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|Total current assets                                                                                                             |  |              | 1,125,488 |  |                      |   | 1,076,386 | 
|Property, plant and equipment                                                                                                    |  |              | 81,236    |  |                      |   | 84,160    | 
|Goodwill                                                                                                                         |  |              | 547,184   |  |                      |   | 547,184   | 
|Other intangible assets                                                                                                          |  |              | 67,986    |  |                      |   | 74,616    | 
|Other assets                                                                                                                     |  |              | 71,183    |  |                      |   | 79,210    | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|                                                                                                                                 |  |             
|Total assets                                                                                                                     |  | $            | 1,893,077 |  |                      | $ | 1,861,556 | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|                                                                                                                                
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                             | 
|                                                                                                                                 |  |             
|Current liabilities:                                                                                                             |  |              |           |  |                      |   |           | 
|Accounts payable                                                                                                                 |  | $            | 328,305   |  |                      | $ | 298,160   | 
|Accrued liabilities                                                                                                              |  |              | 189,374   |  |                      |   | 172,560   | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|Total current liabilities                                                                                                        |  |              | 517,679   |  |                      |   | 470,720   | 
|Other liabilities                                                                                                                |  |              | 189,059   |  |                      |   | 185,835   | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|Total liabilities                                                                                                                |  |              | 706,738   |  |                      |   | 656,555   | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|                                                                                                                                 |  |             
|Commitments and contingencies                                                                                                    |  |              |           |  |                      |   |           | 
|                                                                                                                                 |  |             
|Shareholders equity:                                                                                                            |  |              |           |  |                      |   |           | 
|Shares, par value CHF 0.25 - 191,606 issued and authorizedand 50,000 conditionally authorized at June 30, 2011
andMarch 31, 2011 |  |              | 33,370    |  |                      |   | 33,370    | 
|Additional paid-in capital                                                                                                       |  |              | 6,952     |  |                      |   | -         | 
|Less shares in treasury, at cost, 12,326 at June 30, 2011and 12,433 at March 31, 2011                                            |  |              | (260,938) |  |                      |   | (264,019) | 
|Retained earnings                                                                                                                |  |              | 1,484,562 |  |                      |   | 1,514,168 | 
|Accumulated other comprehensive loss                                                                                             |  |              | (77,607)  |  |                      |   | (78,518)  | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|                                                                                                                                 |  |             
|Total shareholders equity                                                                                                       |  |              | 1,186,339 |  |                      |   | 1,205,001 | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 
|                                                                                                                                 |  |             
|Total liabilities and shareholders equity                                                                                       |  | $            | 1,893,077 |  |                      | $ | 1,861,556 | 
|                                                                                                                                 |  |              |           |  |                      |   |           | 

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



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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

|                                                                            |  |                            |          |  |      |   |          | 
|--------------------------------------------------------------------------- |  | -------------------------- | -------- |  | ---- | - | -------- | 
|                                                                            |  | Three months endedJune 30, |         
|                                                                            |  | 2011                       |          |  | 2010 |  
|                                                                            |  | (Unaudited)                |         
|Cash flows from operating activities:                                       |  |                            |          |  |      |   |          | 
|Net income (loss)                                                           |  | $                          | (29,606) |  |      | $ | 19,522   | 
|Non-cash items included in net income (loss):                               |  |                            |          |  |      |   |          | 
|Depreciation                                                                |  |                            | 13,172   |  |      |   | 12,338   | 
|Amortization of other intangible assets                                     |  |                            | 6,630    |  |      |   | 6,911    | 
|Inventory valuation adjustment                                              |  |                            | 34,074   |  |      |   | -        | 
|Share-based compensation expense                                            |  |                            | 9,715    |  |      |   | 8,462    | 
|Gain on disposal of property and plant                                      |  |                            | (4,904)  |  |      |   | (838)    | 
|Excess tax benefits from share-based compensation                           |  |                            | (24)     |  |      |   | (421)    | 
|Gain on cash surrender value of life insurance policies                     |  |                            | -        |  |      |   | (440)    | 
|Deferred income taxes and other                                             |  |                            | (13,701) |  |      |   | (292)    | 
|Changes in assets and liabilities:                                          |  |                            |          |  |      |   |          | 
|Accounts receivable                                                         |  |                            | 19,097   |  |      |   | (18,404) | 
|Inventories                                                                 |  |                            | (54,783) |  |      |   | (66,019) | 
|Other assets                                                                |  |                            | (6,015)  |  |      |   | (4,945)  | 
|Accounts payable                                                            |  |                            | 29,346   |  |      |   | 60,525   | 
|Accrued liabilities                                                         |  |                            | 743      |  |      |   | (10,281) | 
|                                                                            |  |                            |          |  |      |   |          | 
|Net cash provided by operating activities                                   |  |                            | 3,744    |  |      |   | 6,118    | 
|                                                                            |  |                            |          |  |      |   |          | 
|Cash flows from investing activities:                                       |  |                            |          |  |      |   |          | 
|Purchases of property, plant and equipment                                  |  |                            | (10,561) |  |      |   | (11,918) | 
|Proceeds from sale of property and plant                                    |  |                            | 4,904    |  |      |   | 2,688    | 
|Purchases of trading investments                                            |  |                            | (3,545)  |  |      |   | -        | 
|Proceeds from sales of trading investments                                  |  |                            | 3,500    |  |      |   | -        | 
|                                                                            |  |                            |          |  |      |   |          | 
|Net cash used in investing activities                                       |  |                            | (5,702)  |  |      |   | (9,230)  | 
|                                                                            |  |                            |          |  |      |   |          | 
|Cash flows from financing activities:                                       |  |                            |          |  |      |   |          | 
|Proceeds from sale of shares upon exercise of options and purchase rights   |  |                            | 607      |  |      |   | 5,329    | 
|Tax withholdings related to net share settlements of restricted stock units |  |                            | (176)    |  |      |   | (223)    | 
|Excess tax benefits from share-based compensation                           |  |                            | 24       |  |      |   | 421      | 
|                                                                            |  |                            |          |  |      |   |          | 
|Net cash provided by financing activities                                   |  |                            | 455      |  |      |   | 5,527    | 
|                                                                            |  |                            |          |  |      |   |          | 
|Effect of exchange rate changes on cash and cash equivalents                |  |                            | (61)     |  |      |   | (5,044)  | 
|                                                                            |  |                            |          |  |      |   |          | 
|                                                                            |  |                           
|Net decrease in cash and cash equivalents                                   |  |                            | (1,564)  |  |      |   | (2,629)  | 
|Cash and cash equivalents at beginning of period                            |  |                            | 477,931  |  |      |   | 319,944  | 
|                                                                            |  |                            |          |  |      |   |          | 
|                                                                            |  |                           
|Cash and cash equivalents at end of period                                  |  | $                          | 476,367  |  |      | $ | 317,315  | 
|                                                                            |  |                            |          |  |      |   |          | 

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



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LOGITECH INTERNATIONAL S.A.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

(In thousands)

(Unaudited)



|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|----------------------------------------------------------- |  | ----------------- | ------- |  | ------- | - | ------ | --------------- |  | - | -------- |  |  | ------------- | ------ |  | -------- | - | --------- | ----------- |  | - | --------- |  |  | - | -------- |  |  | - | --------- | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           | Accumulated |  |   |           | 
|                                                            |  |                   |         |  |         |   |        | Additional      |  |   |          |  |  |               |        |  |          |   |           | other       |  |   |           | 
|                                                            |  | Registered shares |         |  | paid-in |   |        | Treasury shares |  |   | Retained |  |  | comprehensive |        |  |          |  
|                                                            |  | Shares            |         |  | Amount  |   |        | capital         |  |   | Shares   |  |  | Amount        |        |  | earnings |   |           | loss        |  |   | Total     | 
|March 31, 2010                                              |  |                   | 191,606 |  |         | $ | 33,370 |                 |  | $ | 14,880   |  |  |               | 16,435 |  |          | $ | (382,512) |             |  | $ | 1,406,618 |  |  | $ | (72,641) |  |  | $ | 999,715   | 
|Net income                                                  |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | 19,522    |  |  |   | -        |  |  |   | 19,522    | 
|Cumulative translation adjustment                           |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | (4,353)  |  |  |   | (4,353)   | 
|Net deferred hedging loss                                   |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | (985)    |  |  |   | (985)     | 
|Pension liability adjustment                                |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | 230      |  |  |   | 230       | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|Total comprehensive income                                  |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   | 14,414    | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|Tax provision for exercise of stock options                 |  |                   | -       |  |         |   | -      |                 |  |   | (212)    |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | -        |  |  |   | (212)     | 
|Sale of shares upon exercise of options and purchase rights |  |                   | -       |  |         |   | -      |                 |  |   | (10,200) |  |  |               | (574)  |  |          |   | 15,545    |             |  |   | -         |  |  |   | -        |  |  |   | 5,345     | 
|Issuance of shares upon vesting of restricted stock units   |  |                   | -       |  |         |   | -      |                 |  |   | (731)    |  |  |               | (18)   |  |          |   | 508       |             |  |   | -         |  |  |   | -        |  |  |   | (223)     | 
|Share-based compensation expense                            |  |                   | -       |  |         |   | -      |                 |  |   | 8,431    |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | -        |  |  |   | 8,431     | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|                                                            |  |                   |         |  |         |   |        |                
|June 30, 2010                                               |  |                   | 191,606 |  |         | $ | 33,370 |                 |  | $ | 12,168   |  |  |               | 15,843 |  |          | $ | (366,459) |             |  | $ | 1,426,140 |  |  | $ | (77,749) |  |  | $ | 1,027,470 | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|                                                            |  |                   |         |  |         |   |        |                
|March 31, 2011                                              |  |                   | 191,606 |  |         | $ | 33,370 |                 |  | $ | -        |  |  |               | 12,433 |  |          | $ | (264,019) |             |  | $ | 1,514,168 |  |  | $ | (78,518) |  |  | $ | 1,205,001 | 
|Net loss                                                    |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | (29,606)  |  |  |   | -        |  |  |   | (29,606)  | 
|Cumulative translation adjustment                           |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | 1,330    |  |  |   | 1,330     | 
|Net deferred hedging gain                                   |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | 682      |  |  |   | 682       | 
|Pension liability adjustment                                |  |                   | -       |  |         |   | -      |                 |  |   | -        |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | (1,101)  |  |  |   | (1,101)   | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|Total comprehensive loss                                    |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   | (28,695)  | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|Tax benefit from exercise of stock options                  |  |                   | -       |  |         |   | -      |                 |  |   | 4        |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | -        |  |  |   | 4         | 
|Sale of shares upon exercise of options and purchase rights |  |                   | -       |  |         |   | -      |                 |  |   | (1,580)  |  |  |               | (77)   |  |          |   | 2,197     |             |  |   | -         |  |  |   | -        |  |  |   | 617       | 
|Issuance of shares upon vesting of restricted stock units   |  |                   | -       |  |         |   | -      |                 |  |   | (1,060)  |  |  |               | (30)   |  |          |   | 884       |             |  |   | -         |  |  |   | -        |  |  |   | (176)     | 
|Share-based compensation expense                            |  |                   | -       |  |         |   | -      |                 |  |   | 9,588    |  |  |               | -      |  |          |   | -         |             |  |   | -         |  |  |   | -        |  |  |   | 9,588     | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 
|                                                            |  |                   |         |  |         |   |        |                
|June 30, 2011                                               |  |                   | 191,606 |  |         | $ | 33,370 |                 |  | $ | 6,952    |  |  |               | 12,326 |  |          | $ | (260,938) |             |  | $ | 1,484,562 |  |  | $ | (77,607) |  |  | $ | 1,186,339 | 
|                                                            |  |                   |         |  |         |   |        |                 |  |   |          |  |  |               |        |  |          |   |           |             |  |   |           |  |  |   |          |  |  |   |           | 



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



7



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##### Table of Contents

LOGITECH INTERNATIONAL S.A.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Note 1  The Company

Logitech is a world leader in products that connect people to the digital experiences they care about.
Spanning multiple computing, communications and entertainment platforms, we develop and market innovative hardware and software products that enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and
video communication over the Internet, video security and home-entertainment control. Our products for home and business PCs (personal computers) include mice, trackballs, keyboards, interactive gaming controllers, multimedia speakers, headsets,
webcams, and lapdesks. Our tablet accessories include keyboards, keyboard cases, earphones, wireless speakers and speaker stands. Our Internet communications products include webcams, headsets, video communications services, and digital video
security systems for a home or small business. Our digital music products include speakers, earphones, and custom in-ear monitors. For home entertainment systems, we offer the Harmony line of advanced remote controls, Squeezebox wireless music
solutions and, in the United States, a line of Logitech products for the Google TV platform. For gaming consoles, we offer a range of gaming controllers and microphones, as well as other accessories. Our LifeSize division offers scalable HD
(high-definition) video communications endpoints, HD video conferencing systems with integrated monitors, video bridges and other infrastructure software and hardware to support large scale video deployments, and services to support these products.

We sell our peripheral products to a network of distributors and resellers and to OEMs (original equipment
manufacturers). We sell our LifeSize products and services to distributors, value-added resellers, OEMs, and, occasionally, direct enterprise customers. The large majority of our revenues have historically been derived from sales of our peripheral
products for use by consumers.

Logitech was founded in Switzerland in 1981, and Logitech International S.A.
has been the parent holding company of Logitech since 1988. Logitech International S.A. is a Swiss holding company with its registered office in Apples, Switzerland, which conducts its business through subsidiaries in the Americas, EMEA (Europe,
Middle East, Africa) and Asia Pacific. Shares of Logitech International S.A. are listed on both the Nasdaq Global Select Market, under the trading symbol LOGI, and the SIX Swiss Exchange, under the trading symbol LOGN.

Note 2  Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Logitech and its subsidiaries. All intercompany balances and transactions have been eliminated. The consolidated financial statements are
presented in accordance with U.S. GAAP (accounting principles generally accepted in the United States of America) for interim financial information and therefore do not include all the information required by U.S. GAAP for complete financial
statements. They should be read in conjunction with the Companys audited consolidated financial statements for the fiscal year ended March 31, 2011 included in its Annual Report on Form 10-K.

Certain prior year financial statement amounts have been reclassified to conform to the current year presentation with no
impact on previously reported net income.

In the opinion of management, these consolidated financial
statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods



8



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##### Table of Contents

presented. Operating results for the three months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending March 31, 2012 or any future
periods.

Fiscal Year

The Companys fiscal year ends on March 31. Interim quarters are thirteen-week periods, each ending on a Friday. For purposes of presentation, the Company has indicated its quarterly periods as
ending on the month end.

Changes in Significant Accounting Policies

There have been no substantial changes in our significant accounting policies during the three months ended June 30,
2011 compared with the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2011.

Use of Estimates

The preparation of financial
statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect reported amounts of assets, liabilities, net sales and expenses, and the disclosure of contingent assets and liabilities. Although
these estimates are based on managements best knowledge of current events and actions that may impact the Company in the future, actual results could differ from those estimates.

Recent Accounting Pronouncements

In May 2011, the
FASB (Financial Accounting Standards Board) issued ASU (Accounting Standards Update) 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU
2011-04 provides a consistent definition of fair value and ensures that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 also changes certain fair value
measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. ASU 2011-04 is effective during interim and annual periods beginning after December 15, 2011. The Company will adopt ASU 2011-04
in the fourth quarter of fiscal year 2012. The Company is evaluating the impact of adopting ASU 2011-04, but currently believes there will be no significant impact on its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220)Presentation of Comprehensive
Income. ASU 2011-05 requires disclosure of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive
statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders equity. ASU 2011-04 is effective for fiscal years, and interim periods within those
years, beginning after December 15, 2011. The Company will adopt ASU 2011-04 in the first quarter of fiscal year 2013. The adoption of this standard will impact only the presentation format of our consolidated financial statements.

Note 3  Net Income (Loss) per Share

The computations of basic and diluted net income (loss) per share for the Company were as follows (in
thousands except per share amounts):



9



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##### Table of Contents

|                                                 |  |                             |          |  |      |   |         | 
|------------------------------------------------ |  | --------------------------- | -------- |  | ---- | - | ------- | 
|                                                 |  | Three months endedJune 
30, |         
|                                                 |  | 2011                        |          |  | 2010 |  
|                                                 |  |                            
|Net income (loss)                                |  | $                           | (29,606) |  |      | $ | 19,522  | 
|                                                 |  |                            
|Weighted average shares - basic                  |  |                             | 179,331  |  |      |   | 175,492 | 
|Effect of potentially dilutive share equivalents |  |                             | -        |  |      |   | 1,866   | 
|                                                 |  |                             |          |  |      |   |         | 
|                                                 |  |                            
|Weighted average shares - diluted                |  |                             | 179,331  |  |      |   | 177,358 | 
|                                                 |  |                             |          |  |      |   |         | 
|                                                 |  |                            
|Net income (loss) per share - basic              |  | $                           | (0.17)   |  |      | $ | 0.11    | 
|Net income (loss) per share - diluted            |  | $                           | (0.17)   |  |      | $ | 0.11    | 

Employee equity share options, non-vested shares and similar share-based compensation
awards granted by the Company are treated as potential shares in computing diluted net income or loss per share. Diluted shares outstanding include the dilutive effect of in-the-money share-based awards which is calculated based on the average share
price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising share-based awards, the amount of compensation cost for future service that the Company has not yet
recognized, and the amount of tax impact that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

During the three months ended June 30, 2011 and 2010, 15,939,015 and 12,991,196 share equivalents attributable to
outstanding stock options and RSUs (restricted stock units) were excluded from the calculation of diluted net income (loss) per share because the combined exercise price, average unamortized fair value and assumed tax benefits upon exercise of these
options and vesting of RSUs were greater than the average market price of the Companys shares, and therefore their inclusion would have been anti-dilutive. For the three months ended June 30, 2011, potentially dilutive share equivalents
were excluded from the computation of diluted net loss per share because their inclusion in calculating a net loss per share would have been anti-dilutive.

Note 4  Employee Benefit Plans

Employee Share Purchase Plans and Stock Incentive Plans

As of June 30, 2011, the Company offers the 2006 ESPP (2006 Employee Share Purchase Plan (Non-U.S.)), the 1996 ESPP
(1996 Employee Share Purchase Plan (U.S.)) and the 2006 Stock Incentive Plan. Shares issued to employees as a result of purchases or exercises under these plans are generally issued from shares held in treasury.

The following table summarizes the share-based compensation expense and related tax benefit recognized for the three
months ended June 30, 2011 and 2010 (in thousands):



10



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##### Table of Contents

|                                                                |  |                                 |         |  |      |   |         | 
|--------------------------------------------------------------- |  | ------------------------------- | ------- |  | ---- | - | ------- | 
|                                                                |  | Three months ended    June 
30, |        
|                                                                |  | 2011                            |         |  | 2010 |  
|                                                                |  |                                
|Cost of goods sold                                              |  | $                               | 1,160   |  |      | $ | 991     | 
|                                                                |  |                                 |         |  |      |   |         | 
|                                                                |  |                                
|Share-based compensation expense included in gross profit       |  |                                 | 1,160   |  |      |   | 991     | 
|                                                                |  |                                 |         |  |      |   |         | 
|Operating expenses:                                             |  |                                 |         |  |      |   |         | 
|Marketing and selling                                           |  |                                 | 3,517   |  |      |   | 3,077   | 
|Research and development                                        |  |                                 | 1,808   |  |      |   | 1,776   | 
|General and administrative                                      |  |                                 | 3,230   |  |      |   | 2,618   | 
|                                                                |  |                                 |         |  |      |   |         | 
|Share-based compensation expense included in operating expenses |  |                                 | 8,555   |  |      |   | 7,471   | 
|                                                                |  |                                 |         |  |      |   |         | 
|Total share-based compensation expense                          |  |                                 | 9,715   |  |      |   | 8,462   | 
|Income tax benefit                                              |  |                                 | (2,389) |  |      |   | (1,895) | 
|                                                                |  |                                 |         |  |      |   |         | 
|                                                                |  |                                
|Share-based compensation expense, net of income tax             |  | $                               | 7,326   |  |      | $ | 6,567   | 
|                                                                |  |                                 |         |  |      |   |         | 

As of June 30, 2011 and 2010, $0.9 million and $0.8 million of share-based
compensation cost was capitalized to inventory. The following table summarizes total share-based compensation cost not yet recognized and the number of months over which such cost is expected to be recognized, on a weighted-average basis by type of
grant (in thousands, except number of months):



|                                           |  |                                    |        |  |                              |  |    | 
|------------------------------------------ |  | ---------------------------------- | ------ |  | ---------------------------- |  | -- | 
|                                           |  | June 30, 2011                      |       
|                                           |  | CompensationCost Not YetRecognized |        |  | Months ofFuture  Recognition | 
|                                           |  |                                   
|Non-vested stock options                   |  | $                                  | 20,160 |  |                              |  | 23 | 
|Time-based RSUs                            |  |                                    | 23,994 |  |                              |  | 39 | 
|Performance-based RSUs                     |  |                                    | 16,323 |  |                              |  | 33 | 
|                                           |  |                                    |        |  |                              |  |    | 
|                                           |  |                                   
|Total compensation cost not yet recognized |  | $                                  | 60,477 |  |                              |  |    | 
|                                           |  |                                    |        |  |                              |  |    | 

A summary of the Companys stock option activity for the three months ended
June 30, 2011 and 2010 is as follows (in thousands, except per share data; exercise prices are weighted averages):



|                                         |  |                             |        |  |                 |   |    |        |  |  |                 |  |  |   |    | 
|---------------------------------------- |  | --------------------------- | ------ |  | --------------- | - | -- | ------ |  |  | --------------- |  |  | - | -- | 
|                                         |  | Three Months ended June 30, |       
|                                         |  | 2011                        |        |  | 2010            |  
|                                         |  | Number                      |        |  | Exercise  Price |   |    | Number |  |  | Exercise  Price | 
|                                         |  |                             |        | 
|Options outstanding, beginning of period |  |                             | 16,312 |  |                 | $ | 19 |        |  |  | 20,037          |  |  | $ | 18 | 
|Granted                                  |  |                             | -      |  |                 | $ | -  |        |  |  | 186             |  |  | $ | 15 | 
|Exercised                                |  |                             | (74)   |  |                 | $ | 8  |        |  |  | (533)           |  |  | $ | 10 | 
|Cancelled or expired                     |  |                             | (599)  |  |                 | $ | 22 |        |  |  | (451)           |  |  | $ | 21 | 
|                                         |  |                             |        |  |                 |   |    |        |  |  |                 |  |  |   |    | 
|                                         |  |                             |        | 
|Options outstanding, end of period       |  |                             | 15,639 |  |                 | $ | 20 |        |  |  | 19,239          |  |  | $ | 18 | 
|                                         |  |                             |        |  |                 |   |    |        |  |  |                 |  |  |   |    | 
|                                         |  |                             |        | 
|Options exercisable, end of period       |  |                             | 11,446 |  |                 | $ | 20 |        |  |  | 11,496          |  |  | $ | 17 | 
|                                         |  |                             |        |  |                 |   |    |        |  |  |                 |  |  |   |    | 



11



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##### Table of Contents

The total pretax intrinsic value of options exercised during the three
months ended June 30, 2011 and 2010 was $0.3 million and $3.4 million and the tax benefit realized for the tax deduction from options exercised during those periods was $0.1 million and $0.8 million. The total fair value of options vested as of
June 30, 2011 and 2010 was $74.9 million and $74.3 million.

The fair value of employee stock options
granted and shares purchased under the Companys employee purchase plans was estimated using the Black-Scholes-Merton option-pricing valuation model applying the following assumptions and values. There were no stock options granted in the three
months ended June 30, 2011.



|                        |  |                             |          |  |                    |  |          |      |  |  |      |  |  |  |           | 
|----------------------- |  | --------------------------- | -------- |  | ------------------ |  | -------- | ---- |  |  | ---- |  |  |  | --------- | 
|                        |  | Three Months Ended June 30, |         
|                        |  |                             |          | 
|                        |  | 2011                        |          |  | 2010               |  |          | 2011 |  |  | 2010 | 
|                        |  |                             |          |  |                    |  |          |     
|                        |  | Purchase Plans              |          |  | Stock Option Plans | 
|                        |  |                             |          |  |                    |  |          |     
|                        |  |                             |          | 
|Dividend yield          |  |                             | 0%       |  |                    |  | 0%       |      |  |  | n/a  |  |  |  | 0%        | 
|Expected life           |  |                             | 6 months |  |                    |  | 6 months |      |  |  | n/a  |  |  |  | 4.0 years | 
|Expected volatility     |  |                             | 33%      |  |                    |  | 34%      |      |  |  | n/a  |  |  |  | 48%       | 
|Risk-free interest rate |  |                             | 0.17%    |  |                    |  | 0.15%    |      |  |  | n/a  |  |  |  | 1.80%     | 

The dividend yield assumption is based on the Companys history and future
expectations of dividend payouts. The Company has not paid dividends since 1996. The expected option life represents the weighted-average period the stock options or purchase offerings are expected to remain outstanding. The expected life is based
on historical settlement rates, which the Company believes are most representative of future exercise and post-vesting termination behaviors. Expected share price volatility is based on historical volatility using daily prices over the term of the
options or purchase offerings. The Company considers historical share price volatility as most representative of future volatility. The risk-free interest rate assumptions are based upon the implied yield of U.S. Treasury zero-coupon issues
appropriate for the term of the Companys stock options or purchase offerings.

The Company estimates
option forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and records share-based
compensation expense only for those awards that are expected to vest.

The following table presents the
weighted average grant-date fair values of options granted and the expected forfeiture rates. There were no stock options granted in the three months ended June 30, 2011.



|                                                          |  |                             |      |  |                    |   |      |      |  |  |      |  |  |   |      | 
|--------------------------------------------------------- |  | --------------------------- | ---- |  | ------------------ | - | ---- | ---- |  |  | ---- |  |  | - | ---- | 
|                                                          |  | Three Months Ended June 30, |     
|                                                          |  |                             |      | 
|                                                          |  | 2011                        |      |  | 2010               |   |      | 2011 |  |  | 2010 | 
|                                                          |  |                             |      |  |                    |   |      |     
|                                                          |  | Purchase Plans              |      |  | Stock Option Plans |  
|                                                          |  |                             |      |  |                    |   |      |     
|                                                          |  |                             |      | 
|Weighted average grant-date fair value of options granted |  | $                           | 4.69 |  |                    | $ | 4.18 |      |  |  | n/a  |  |  | $ | 5.82 | 
|Expected forfeitures                                      |  |                             | 0%   |  |                    |   | 0%   |      |  |  | n/a  |  |  |   | 9%   | 

A summary of the Companys time- and performance-based RSU activity for the three
months ended June 30, 2011 and 2010 is as follows (in thousands, except per share values; grant-date fair values are weighted averages):



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##### Table of Contents

|                                      |  |                             |       |  |           |   |    |        |  |  |           |  |  |   |    | 
|------------------------------------- |  | --------------------------- | ----- |  | --------- | - | -- | ------ |  |  | --------- |  |  | - | -- | 
|                                      |  | Three Months ended June 30, |      
|                                      |  |                             |       | 
|                                      |  | 2011                        |       |  | 2010      |  
|                                      |  |                             |       |  |           |   |    |       
|                                      |  |                             |       |  | Grant     |   |    |        |  |  | Grant     | 
|                                      |  |                             |       |  | Date Fair |   |    |        |  |  | Date Fair | 
|                                      |  | Number                      |       |  | Value     |   |    | Number |  |  | Value     | 
|                                      |  |                             |       | 
|RSUs outstanding, beginning of period |  |                             | 2,370 |  |           | $ | 21 |        |  |  | 514       |  |  | $ | 17 | 
|Granted                               |  |                             | 714   |  |           | $ | 13 |        |  |  | -         |  |  | $ | -  | 
|Vested                                |  |                             | (50)  |  |           | $ | 13 |        |  |  | (78)      |  |  | $ | 11 | 
|Cancelled or expired                  |  |                             | (155) |  |           | $ | 19 |        |  |  | (6)       |  |  | $ | 14 | 
|                                      |  |                             |       |  |           |   |    |        |  |  |           |  |  |   |    | 
|                                      |  |                             |       | 
|RSUs outstanding, end of period       |  |                             | 2,879 |  |           | $ | 20 |        |  |  | 430       |  |  | $ | 18 | 
|                                      |  |                             |       |  |           |   |    |        |  |  |           |  |  |   |    | 

The total fair value of RSUs vested during the three months ended June 30, 2011 and
2010 was $0.7 million and $0.9 million and the tax benefit realized for the tax deduction from RSUs vested during these periods was $0.2 million and $0.2 million.

The Company estimates the fair value of time-based RSUs based on the share market price on the date of grant. The fair
value of performance-based RSUs is estimated using the Monte-Carlo simulation method applying the following assumptions:



|                        |  |         |         |  |         |  |         |         |  |  |         |  |  |  |         | 
|----------------------- |  | ------- | ------- |  | ------- |  | ------- | ------- |  |  | ------- |  |  |  | ------- | 
|                        |  | FY 2012 |         |  | FY 2011 |  |         | FY 2010 |  |  | FY 2009 | 
|                        |  | Grants  |         |  | Grants  |  |         | Grants  |  |  | Grants  | 
|                        |  |         |         | 
|Dividend yield          |  |         | 0%      |  |         |  | 0%      |         |  |  | 0%      |  |  |  | 0%      | 
|Expected life           |  |         | 3 years |  |         |  | 3 years |         |  |  | 2 years |  |  |  | 2 years | 
|Expected volatility     |  |         | 51%     |  |         |  | 51%     |         |  |  | 58%     |  |  |  | 41%     | 
|Risk-free interest rate |  |         | 1.35%   |  |         |  | 0.81%   |         |  |  | 1.11%   |  |  |  | 1.82%   | 

The dividend yield assumption is based on the Companys history and future
expectations of dividend payouts. The expected life of the performance-based RSUs is the service period at the end of which the RSUs will vest if the performance conditions are satisfied. The volatility assumption is based on the actual volatility
of Logitechs daily closing share price over a look-back period equal to the years of expected life. The risk free interest rate is derived from the yield on U.S. Treasury Bonds for a term of the same number of years as the expected life.

Defined Contribution Plans

Certain of the Companys subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees. Contributions to these plans are discretionary for certain plans
and are based on specified or statutory requirements for others. The charges to expense for these plans for the three months ended June 30, 2011 and 2010 were $3.1 million and $2.1 million.

Defined Benefit Plans

Certain of the Companys subsidiaries sponsor defined benefit pension plans or non-retirement post-employment benefits covering substantially all of their employees. Benefits are provided based on
employees years of service and earnings, or in accordance with applicable employee benefit regulations. The Companys practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax
regulations.

The net periodic benefit cost for defined benefit pension plans and non-retirement
post-employment benefit obligations for the three months ended June 30, 2011 and 2010 was as follows (in thousands):



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##### Table of Contents

|                                          |  |                             |       |  |      |   |       | 
|----------------------------------------- |  | --------------------------- | ----- |  | ---- | - | ----- | 
|                                          |  | Three months endedJune 
30, |      
|                                          |  | 2011                        |       |  | 2010 |  
|                                          |  |                            
|Service cost                              |  | $                           | 1,295 |  |      | $ | 1,019 | 
|Interest cost                             |  |                             | 505   |  |      |   | 402   | 
|Expected return on plan assets            |  |                             | (418) |  |      |   | (415) | 
|Amortization of net transition obligation |  |                             | 1     |  |      |   | 1     | 
|Amortization of net prior service cost    |  |                             | 39    |  |      |   | 36    | 
|Recognized net actuarial loss             |  |                             | 100   |  |      |   | 87    | 
|                                          |  |                             |       |  |      |   |       | 
|                                          |  |                            
|Net periodic benefit cost                 |  | $                           | 1,522 |  |      | $ | 1,130 | 
|                                          |  |                             |       |  |      |   |       | 

Note 5  Income Taxes

The Company is incorporated in Switzerland but operates in various countries with differing tax laws
and rates. Further, a portion of the Companys income before taxes and the provision for income taxes are generated outside of Switzerland.

The income tax benefit for the three months ended June 30, 2011 and 2010 was $9.5 million and $5.4 million based on effective income tax rates of 24.4% of pre-tax loss and 38.3% of pre-tax income.
The change in the effective income tax rate for the three months ended June 30, 2011 compared with the three months ended June 30, 2010 is primarily due to the mix of income and losses in the various tax jurisdictions in which the Company
operates, and a discrete tax benefit of $7.2 million in the three months ended June 30, 2010 from the closure of income tax audits in certain jurisdictions.

Current deferred tax assets increased from $27.0 million as of March 31, 2011 to $51.8 million as of June 30,
2011. Approximately $12.0 million of the increase relates to the reclassification of deferred tax assets from non-current to current, primarily due to the valuation adjustment to cost of goods sold for the planned price reduction on Logitech Revue
and related peripherals. The remaining increase is primarily due to the tax benefit from operating losses generated in the three month period ended June 30, 2011.

As of June 30 and March 31, 2011, the total amount of unrecognized tax benefits and related accrued interest
and penalties due to uncertain tax positions was $137.7 million and $138.1 million, of which $117.0 million and $118.2 million would affect the effective income tax rate if recognized. The decline in the income tax liability associated with
uncertain tax benefits is primarily due to the expiration of statutes of limitations, offset by the impact of foreign currency exchange rates and the accrual of interest expense.

The Company continues to recognize interest and penalties related to unrecognized tax positions in income tax expense. As
of June 30, 2011, accrued interest and penalties related to uncertain tax positions increased to $8.1 million from $8.0 million as of March 31, 2011.

The Company files Swiss and foreign tax returns. For all these tax returns, the Company is generally not subject to tax examinations for years prior to 1999. During the third quarter of fiscal year 2011,
the U.S. Internal Revenue Service expanded its examination of the Companys U.S. subsidiary to include fiscal years 2008 and 2009 in addition to fiscal years 2006 and 2007. The Company is also under examination in other tax jurisdictions. At
this time it is not possible to estimate the potential impact that these examinations may have on income tax expense. If the examinations are resolved unfavorably, there is a possibility they may have a material impact on our results of operations.

Although the Company has adequately provided for uncertain tax positions, the provisions on these positions
may change as revised estimates are made or the underlying matters are settled or otherwise resolved. Although the timing of the resolution or closure on audits is highly uncertain, the Company does not believe it is reasonably possible that the
unrecognized tax benefits would materially change in the next twelve months.



14



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##### Table of Contents

Note 6  Balance Sheet Components

The following table provides the components of certain balance sheet asset amounts as of June 30
and March 31, 2011 (in thousands):



|                                   |  |                       |           |  |                        |   |           | 
|---------------------------------- |  | --------------------- | --------- |  | ---------------------- | - | --------- | 
|                                   |  | June 30,        
2011 |           |  | March 31,       
 2011 |  
|Accounts receivable:               |  |                       |           |  |                        |   |           | 
|Accounts receivable                |  | $                     | 402,959   |  |                        | $ | 435,331   | 
|Allowance for doubtful accounts    |  |                       | (4,036)   |  |                        |   | (4,086)   | 
|Allowance for returns              |  |                       | (25,972)  |  |                        |   | (29,666)  | 
|Cooperative marketing arrangements |  |                       | (24,997)  |  |                        |   | (28,669)  | 
|Customer incentive programs        |  |                       | (48,690)  |  |                        |   | (52,358)  | 
|Pricing programs                   |  |                       | (57,808)  |  |                        |   | (62,258)  | 
|                                   |  |                       |           |  |                        |   |           | 
|                                   |  |                      
|                                   |  | $                     | 241,456   |  |                        | $ | 258,294   | 
|                                   |  |                       |           |  |                        |   |           | 
|Inventories:                       |  |                       |           |  |                        |   |           | 
|Raw materials                      |  | $                     | 45,734    |  |                        | $ | 37,126    | 
|Work-in-process                    |  |                       | 12        |  |                        |   | 3         | 
|Finished goods                     |  |                       | 271,802   |  |                        |   | 243,685   | 
|                                   |  |                       |           |  |                        |   |           | 
|                                   |  |                      
|                                   |  | $                     | 317,548   |  |                        | $ | 280,814   | 
|                                   |  |                       |           |  |                        |   |           | 
|Other current assets:              |  |                       |           |  |                        |   |           | 
|Tax and VAT refund receivables     |  | $                     | 18,514    |  |                        | $ | 17,810    | 
|Deferred taxes                     |  |                       | 51,812    |  |                        |   | 27,018    | 
|Prepaid expenses and other         |  |                       | 19,791    |  |                        |   | 14,519    | 
|                                   |  |                       |           |  |                        |   |           | 
|                                   |  |                      
|                                   |  | $                     | 90,117    |  |                        | $ | 59,347    | 
|                                   |  |                       |           |  |                        |   |           | 
|Property, plant and equipment:     |  |                       |           |  |                        |   |           | 
|Plant, buildings and improvements  |  | $                     | 54,254    |  |                        | $ | 52,681    | 
|Equipment                          |  |                       | 144,064   |  |                        |   | 137,248   | 
|Computer equipment                 |  |                       | 62,286    |  |                        |   | 60,344    | 
|Computer software                  |  |                       | 86,221    |  |                        |   | 85,338    | 
|                                   |  |                       |           |  |                        |   |           | 
|                                   |  |                       | 346,825   |  |                        |   | 335,611   | 
|Less: accumulated depreciation     |  |                       | (275,806) |  |                        |   | (260,283) | 
|                                   |  |                       |           |  |                        |   |           | 
|                                   |  |                       | 71,019    |  |                        |   | 75,328    | 
|Construction-in-progress           |  |                       | 7,322     |  |                        |   | 5,974     | 
|Land                               |  |                       | 2,895     |  |                        |   | 2,858     | 
|                                   |  |                       |           |  |                        |   |           | 
|                                   |  |                      
|                                   |  | $                     | 81,236    |  |                        | $ | 84,160    | 
|                                   |  |                       |           |  |                        |   |           | 
|Other assets:                      |  |                       |           |  |                        |   |           | 
|Deferred taxes                     |  | $                     | 45,997    |  |                        | $ | 55,897    | 
|Trading investments                |  |                       | 13,784    |  |                        |   | 13,113    | 
|Deposits and other                 |  |                       | 11,402    |  |                        |   | 10,200    | 
|                                   |  |                       |           |  |                        |   |           | 
|                                   |  |                      
|                                   |  | $                     | 71,183    |  |                        | $ | 79,210    | 
|                                   |  |                       |           |  |                        |   |           | 

The following table provides the components of certain balance sheet liability amounts as
of June 30 and March 31, 2011 (in thousands):



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|                                                   |  |              |         |  |               |   |         | 
|-------------------------------------------------- |  | ------------ | ------- |  | ------------- | - | ------- | 
|                                                   |  | June 30,2011 |         |  | March 31,2011 |  
|Accrued liabilities:                               |  |              |         |  |               |   |         | 
|Accrued personnel expenses                         |  | $            | 54,015  |  |               | $ | 50,552  | 
|Accrued marketing expenses                         |  |              | 29,150  |  |               |   | 32,599  | 
|Deferred revenue                                   |  |              | 16,771  |  |               |   | 15,859  | 
|Accrued freight and duty                           |  |              | 11,576  |  |               |   | 12,497  | 
|Accrued royalties                                  |  |              | 5,043   |  |               |   | 5,144   | 
|Warranty accrual                                   |  |              | 4,633   |  |               |   | 4,970   | 
|Non-retirement post-employment benefit obligations |  |              | 3,864   |  |               |   | 3,563   | 
|Income taxes payable - current                     |  |              | 7,157   |  |               |   | 2,569   | 
|Other accrued liabilities                          |  |              | 57,165  |  |               |   | 44,807  | 
|                                                   |  |              |         |  |               |   |         | 
|                                                   |  | $            | 189,374 |  |               | $ | 172,560 | 
|                                                   |  |              |         |  |               |   |         | 
|Long-term liabilities:                             |  |              |         |  |               |   |         | 
|Income taxes payable - non-current                 |  | $            | 131,672 |  |               | $ | 131,968 | 
|Obligation for deferred compensation               |  |              | 13,837  |  |               |   | 13,076  | 
|Defined benefit pension plan liability             |  |              | 28,068  |  |               |   | 26,645  | 
|Other long-term liabilities                        |  |              | 15,482  |  |               |   | 14,146  | 
|                                                   |  |              |         |  |               |   |         | 
|                                                   |  | $            | 189,059 |  |               | $ | 185,835 | 
|                                                   |  |              |         |  |               |   |         | 

Inventories are stated at the lower of cost or market. Inventory as of June 30, 2011
includes a reserve of $22.2 million to reflect the lower of cost or market on our inventory of Logitech Revue and related peripherals on hand. Other accrued liabilities include $15.9 million to reflect the lower of cost or market on the inventory of
Logitech Revue and related peripherals at our suppliers. In the three months ended June 30, 2011, $34.1 million of this valuation adjustment was charged to cost of goods sold, as the result of managements decision in early July 2011 to
reduce the future retail price of Logitech Revue from $249 to $99. The goal of the reduction in retail price is to accelerate adoption of the Google TV platform, which has not met widespread U.S. consumer acceptance, resulting in sales of Logitech
Revue and related products significantly below managements expectations from the launch date through June 30, 2011.

The following table presents the changes in the allowance for doubtful accounts during the three months ended June 30, 2011 and 2010 (in thousands):



|                                                     |  |          |         |  |      |   |         | 
|---------------------------------------------------- |  | -------- | ------- |  | ---- | - | ------- | 
|                                                     |  | June 30, |        
|                                                     |  | 2011     |         |  | 2010 |  
|                                                     |  |          |         |  |      |   |         | 
|Allowance for doubtful accounts, beginning of period |  | $        | (4,086) |  |      | $ | (5,870) | 
|Bad debt expense                                     |  |          | 401     |  |      |   | (422)   | 
|Write-offs net of recoveries                         |  |          | (351)   |  |      |   | 597     | 
|                                                     |  |          |         |  |      |   |         | 
|Allowance for doubtful
accounts, end of period       |  | $        | (4,036) |  |      | $ | (5,695) | 
|                                                     |  |          |         |  |      |   |         | 

Note 7  Financial Instruments

Fair Value Measurements

The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:



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| |  |  | Level 1  Quoted prices in active markets for identical assets or liabilities.
| | - |  | ------------------------------------------------------------------------------



| |  |  | Level 2  Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in
active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or
liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table presents the Companys financial assets and liabilities that were accounted for at fair value,
classified by the level within the fair value hierarchy (in thousands):



|                                        |  |               |         |  |                |   |   |         |  |   |         |  |  |         |         |  |         |   |   |  |  |   |       | 
|--------------------------------------- |  | ------------- | ------- |  | -------------- | - | - | ------- |  | - | ------- |  |  | ------- | ------- |  | ------- | - | - |  |  | - | ----- | 
|                                        |  | June 30, 2011 |         |  | March 31, 2011 |  
|                                        |  | Level 1       |         |  | Level 2        |   |   | Level 3 |  |   | Level 1 |  |  | Level 2 |         |  | Level 3 |  
|                                        |  |               |         |  |                |   |   |         |  |   |         |  |  |         |         | 
|                                        |  |               |         |  |                |   |   |         |  |   |         |  |  |         |         |  |         |   |   |  |  |   |       | 
|Cash and cash equivalents               |  | $             | 476,367 |  |                | $ | - |         |  | $ | -       |  |  | $       | 477,931 |  |         | $ | - |  |  | $ | -     | 
|Trading investments                     |  |               | 13,784  |  |                |   | - |         |  |   | -       |  |  |         | 13,113  |  |         |   | - |  |  |   | -     | 
|Available-for-sale securities           |  |               | -       |  |                |   | - |         |  |   | 1,695   |  |  |         | -       |  |         |   | - |  |  |   | 1,695 | 
|Foreign exchange derivative assets      |  |               | 177     |  |                |   | - |         |  |   | -       |  |  |         | 566     |  |         |   | - |  |  |   | -     | 
|                                        |  |               |         |  |                |   |   |         |  |   |         |  |  |         |         |  |         |   |   |  |  |   |       | 
|Total assets at fair
value              |  | $             | 490,328 |  |                | $ | - |         |  | $ | 1,695   |  |  | $       | 491,610 |  |         | $ | - |  |  | $ | 1,695 | 
|                                        |  |               |         |  |                |   |   |         |  |   |         |  |  |         |         |  |         |   |   |  |  |   |       | 
|                                        |  |               |         |  |                |  
|Foreign exchange derivative liabilities |  | $             | 1,024   |  |                | $ | - |         |  | $ | -       |  |  | $       | 1,881   |  |         | $ | - |  |  | $ | -     | 
|                                        |  |               |         |  |                |   |   |         |  |   |         |  |  |         |         |  |         |   |   |  |  |   |       | 
|Total liabilities at fair
value         |  | $             | 1,024   |  |                | $ | - |         |  | $ | -       |  |  | $       | 1,881   |  |         | $ | - |  |  | $ | -     | 
|                                        |  |               |         |  |                |   |   |         |  |   |         |  |  |         |         |  |         |   |   |  |  |   |       | 

Cash and Cash Equivalents

Cash and cash equivalents consist of bank demand deposits and time deposits. The time deposits have original maturities
of less than 31 days. Cash and cash equivalents are carried at cost, which is equivalent to fair value.

Investment Securities

The Companys investment securities portfolio consists of marketable securities related to a
deferred compensation plan and auction rate securities collateralized by residential and commercial mortgages.

The marketable securities are classified as non-current trading investments and do not have maturity dates. These
securities are recorded at a fair value of $13.8 million and $13.1 million at June 30 and March 31, 2011, based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value
hierarchy. Earnings, gains and losses on trading investments are included in other income (expense), net, and primarily relate to trading securities held at June 30, 2011.

The auction rate securities are classified as non-current available-for-sale investments and have maturity dates in
excess of 10 years. Interest rates on these securities were intended to reset through an auction every 28 days, however auctions for these securities have failed since August 2007. Four of the securities with par value of $32.2 million and estimated
fair value of $0.9 million have experienced events of default and have declared acceleration. The Company does not expect to realize the proceeds, if any, from these securities until a future auction of these securities is successful or a buyer is
found outside of the auction process. These securities have a par value and original cost of $47.5 million, and are recorded at an estimated fair value of $1.7 million at June 30 and March 31, 2011. The estimated fair value was



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determined by estimating future cash flows through time according to each securitys terms, including periodic consideration of overcollateralization and interest coverage tests, and
incorporating estimates of default rate, loss severity, prepayment, and delinquency assumptions when available, for the underlying assets in the securities based on representative indices and various research reports. The estimated coupon and
principal payments were discounted at the rate of return required by investors, based on the characteristics of each security as calculated from the indices. Such valuation methods fall within Level 3 of the fair value hierarchy. Declines in fair
value of the auction rate securities are deemed other-than-temporary and are included in other income (expense), net. Increases in fair value are considered temporary and are included in accumulated other comprehensive loss.

Derivative Financial Instruments

The following table presents the fair values of the Companys derivative instruments and their locations on the Balance Sheet as of June 30 and March 31, 2011 (in thousands):



|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|-------------------------------------------------- |  | ----------------- | ------------ |  | --------------------- | - | --- | ------------- |  | - | ---------- |  |  | ------------ | ----------------- |  | ------------- | - | ----- |  |  | - | ----- | 
|                                                   |  | Asset Derivatives |              |  | Liability Derivatives |  
|                                                   |  |                   |              |  | Fair Value            |   |     |               |  |   | Fair Value | 
|                                                   |  | Location          |              |  | June 30,2011          |   |     | March 31,2011 |  |   | Location   |  |  | June 30,2011 |                   |  | March 31,2011 |  
|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|Derivatives designated as hedging instruments:     |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|Cash Flow Hedges                                   |  |                   | Other assets |  |                       | $ | -   |               |  | $ | -          |  |  |              | Other liabilities |  |               | $ | 1,015 |  |  | $ | 1,763 | 
|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|                                                   |  |                   |              |  |                       |   | -   |               |  |   | -          |  |  |              |                   |  |               |   | 1,015 |  |  |   | 1,763 | 
|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|Derivatives not designated as hedging instruments: |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|Foreign Exchange Forward Contracts                 |  |                   | Other assets |  |                       |   | 133 |               |  |   | 486        |  |  |              | Other liabilities |  |               |   | -     |  |  |   | -     | 
|Foreign Exchange Swap Contracts                    |  |                   | Other assets |  |                       |   | 44  |               |  |   | 80         |  |  |              | Other liabilities |  |               |   | 9     |  |  |   | 118   | 
|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|                                                   |  |                   |              |  |                       |   | 177 |               |  |   | 566        |  |  |              |                   |  |               |   | 9     |  |  |   | 118   | 
|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 
|                                                   |  |                   |              |  |                       | $ | 177 |               |  | $ | 566        |  |  |              |                   |  |               | $ | 1,024 |  |  | $ | 1,881 | 
|                                                   |  |                   |              |  |                       |   |     |               |  |   |            |  |  |              |                   |  |               |   |       |  |  |   |       | 

The following table presents the amounts of gains and losses on the Companys
derivative instruments for the three months ended June 30, 2011 and their locations on its Financial Statements (in thousands):



|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|-------------------------------------------------- |  | ------------------------------------------------------------------------------------ | --- |  | -------------------------------------------------------------------------------------- |  | ------------------ | ----------------------------------------------------------------------------------- |  | - | ------------------------------------------------------ |  |  | --------------------------------------------------- | -------------------- |  |  | - | ----- | 
|                                                   |  | Net amount of gain(loss) deferred as acomponent
ofaccumulated othercomprehensiveloss |     |  | Location of gain(loss) reclassifiedfrom 
accumulatedothercomprehensiveloss into income |  |                    | Amount of gain(loss) reclassifiedfrom accumulatedothercomprehensiveloss into
income |  |   | Location of gain (loss)recognized in incomeimmediately |  |  | Amount of gain(loss) recognizedin incomeimmediately |                     
|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|Derivatives designated as hedging instruments:     |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|Cash Flow Hedges                                   |  | $                                                                                    | 682 |  |                                                                                        |  | Cost of goods sold |                                                                                     |  | $ | 2,478                                                  |  |  |                                                     | Other income/expense |  |  | $ | (97)  | 
|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|                                                   |  |                                                                                      | 682 |  |                                                                                        |  |                    |                                                                                     |  |   | 2,478                                                  |  |  |                                                     |                      |  |  |   | (97)  | 
|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|Derivatives not designated as hedging instruments: |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|Foreign Exchange Forward Contracts                 |  |                                                                                      | -   |  |                                                                                        |  |                    |                                                                                     |  |   | -                                                      |  |  |                                                     | Other income/expense |  |  |   | (52)  | 
|Foreign Exchange Swap Contracts                    |  |                                                                                      | -   |  |                                                                                        |  |                    |                                                                                     |  |   | -                                                      |  |  |                                                     | Other income/expense |  |  |   | (217) | 
|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|                                                   |  |                                                                                      | -   |  |                                                                                        |  |                    |                                                                                     |  |   | -                                                      |  |  |                                                     |                      |  |  |   | (269) | 
|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 
|                                                   |  | $                                                                                    | 682 |  |                                                                                        |  |                    |                                                                                     |  | $ | 2,478                                                  |  |  |                                                     |                      |  |  | $ | (366) | 
|                                                   |  |                                                                                      |     |  |                                                                                        |  |                    |                                                                                     |  |   |                                                        |  |  |                                                     |                      |  |  |   |       | 



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The following table presents the amounts of gains and losses on the
Companys derivative instruments for the three months ended June 30, 2010 and their locations on its Financial Statements (in thousands):



|                                                   |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 
|-------------------------------------------------- |  | ------------------------------------------------------------------------------------ | ----- |  | -------------------------------------------------------------------------------------- |  | ------------------ | ------------------------------------------------------------------------------------ |  | - | ------------------------------------------------------ |  | --------------------------------------------------- | -------------------- |  | - | ------- | 
|                                                   |  | Net amount of gain(loss) deferred as acomponent ofaccumulated
othercomprehensiveloss |       |  | Location of gain(loss) reclassifiedfrom 
accumulatedothercomprehensiveloss into income |  |                    | Amount of gain(loss) reclassifiedfrom 
accumulatedothercomprehensiveloss into income |  |   | Location of gain (loss)recognized in incomeimmediately |  | Amount of gain(loss) recognizedin incomeimmediately |                     
|                                                   |  |                                                                                      |       |  |                                                                                       
|Derivatives designated as hedging instruments:     |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 
|Cash Flow Hedges                                   |  | $                                                                                    | (986) |  |                                                                                        |  | Cost of goods sold |                                                                                      |  | $ | (1,375)                                                |  |                                                     | Other income/expense |  | $ | 46      | 
|                                                   |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 
|                                                   |  |                                                                                      | (986) |  |                                                                                        |  |                    |                                                                                      |  |   | (1,375)                                                |  |                                                     |                      |  |   | 46      | 
|                                                   |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 
|Derivatives not designated as hedging instruments: |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 
|Foreign Exchange Forward Contracts                 |  |                                                                                      | -     |  |                                                                                        |  |                    |                                                                                      |  |   | -                                                      |  |                                                     | Other income/expense |  |   | (507)   | 
|Foreign Exchange Swap Contracts                    |  |                                                                                      | -     |  |                                                                                        |  |                    |                                                                                      |  |   | -                                                      |  |                                                     | Other income/expense |  |   | (918)   | 
|                                                   |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 
|                                                   |  |                                                                                      | -     |  |                                                                                        |  |                    |                                                                                      |  |   | -                                                      |  |                                                     |                      |  |   | (1,425) | 
|                                                   |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 
|                                                   |  | $                                                                                    | (986) |  |                                                                                        |  |                    |                                                                                      |  | $ | (1,375)                                                |  |                                                     |                      |  | $ | (1,379) | 
|                                                   |  |                                                                                      |       |  |                                                                                        |  |                    |                                                                                      |  |   |                                                        |  |                                                     |                      |  |   |         | 

Cash Flow Hedges

The Company enters into foreign exchange forward contracts to hedge against exposure to changes in foreign currency exchange rates related to its subsidiaries forecasted inventory purchases. The
primary risk managed by using derivative instruments is the foreign currency exchange rate risk. The Company has designated these derivatives as cash flow hedges. Logitech does not use derivative financial instruments for trading or speculative
purposes. These hedging contracts generally mature within three months, and are denominated in the same currency as the underlying transactions. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of
accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. The Company assesses the effectiveness of the hedges by comparing changes in the spot rate
of the currency underlying the forward contract with changes in the spot rate of the currency in which the forecasted transaction will be consummated. If the underlying transaction being hedged fails to occur or if a portion of the hedge does not
generate offsetting changes in the foreign currency exposure of forecasted inventory purchases, the Company immediately recognizes the gain or loss on the associated financial instrument in other income (expense). Such losses were immaterial during
the three months ended June 30, 2011 and 2010. Cash flows from such hedges are classified as operating activities in the consolidated statements of cash flows. The notional amounts of foreign exchange forward contracts outstanding related to
forecasted inventory purchases at June 30, 2011 and 2010 were $66.3 million (45.8 million) and $72.7 million (57.9 million). The notional amount represents the future cash flows under contracts to purchase foreign currencies.

Other Derivatives

The Company enters into foreign exchange forward contracts to reduce the short-term effects of foreign currency fluctuations on certain foreign currency receivables or payables. These forward contracts
generally mature within three months. The Company may also enter into foreign exchange swap contracts to economically extend the terms of its foreign exchange forward contracts. The primary risk managed by using forward and swap contracts is the
foreign currency exchange rate risk. The gains or losses on foreign exchange forward contracts are recognized in earnings based on the changes in fair value.

The notional amounts of foreign exchange forward contracts outstanding at June 30, 2011 and 2010 relating to foreign currency receivables or payables were $8.9 million and $7.3 million. Open forward
contracts as of June 30, 2011 consisted of contracts in British pounds to purchase euros at a future date at a



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pre-determined exchange rate. The notional amounts of foreign exchange swap contracts outstanding at June 30, 2011 and 2010 were $14.6 million and $37.7 million. Swap contracts outstanding
at June 30, 2011 consisted of contracts in Mexican pesos and Japanese yen.

The fair value of all our
foreign exchange forward contracts and foreign exchange swap contracts is determined based on quoted foreign exchange forward rates. Quoted foreign exchange forward rates are observable inputs that are classified as Level 1 within the fair value
hierarchy.

Note 8 Other Intangible Assets

The Companys acquired other intangible assets subject to amortization were as follows (in
thousands):



|                    |  |                       |         |  |                           |   |          |                     |  |   |                      |  |  |                           |         |  |                     |   |          |  |  |   |        | 
|------------------- |  | --------------------- | ------- |  | ------------------------- | - | -------- | ------------------- |  | - | -------------------- |  |  | ------------------------- | ------- |  | ------------------- | - | -------- |  |  | - | ------ | 
|                    |  | June 30, 2011         |         |  | March 31, 2011            |  
|                    |  | Gross Carrying Amount |         |  | Accumulated  Amortization |   |          | Net Carrying Amount |  |   | Gross CarryingAmount |  |  | Accumulated  Amortization |         |  | Net Carrying Amount |  
|                    |  |                       |         |  |                           |   |          |                     |  |   |                      |  |  |                           |         |  |                     |   |          |  |  |   |        | 
|Trademark/tradename |  | $                     | 31,972  |  |                           | $ | (24,045) |                     |  | $ | 7,927                |  |  | $                         | 31,907  |  |                     | $ | (23,290) |  |  | $ | 8,617  | 
|Technology          |  |                       | 88,068  |  |                           |   | (49,983) |                     |  |   | 38,085               |  |  |                           | 88,068  |  |                     |   | (45,686) |  |  |   | 42,382 | 
|Customer contracts  |  |                       | 38,537  |  |                           |   | (16,563) |                     |  |   | 21,974               |  |  |                           | 38,537  |  |                     |   | (14,920) |  |  |   | 23,617 | 
|                    |  |                       |         |  |                           |   |          |                     |  |   |                      |  |  |                           |         |  |                     |   |          |  |  |   |        | 
|                    |  | $                     | 158,577 |  |                           | $ | (90,591) |                     |  | $ | 67,986               |  |  | $                         | 158,512 |  |                     | $ | (83,896) |  |  | $ | 74,616 | 
|                    |  |                       |         |  |                           |   |          |                     |  |   |                      |  |  |                           |         |  |                     |   |          |  |  |   |        | 

During the three months ended June 30, 2011, changes in the gross carrying value of
other intangible assets related to foreign currency translation adjustments.

For the three months ended
June 30, 2011 and 2010, amortization expense for other intangible assets was $6.6 million and $6.9 million. The Company expects that amortization expense for the nine-month period ending March 31, 2012 will be $19.4 million, and annual
amortization expense for fiscal years 2013, 2014 and 2015 will be $23.1 million, $16.9 million, and $8.2 million, and $0.4 million thereafter.

Note 9  Financing Arrangements

The Company had several uncommitted, unsecured bank lines of credit aggregating $150.3 million at
June 30, 2011. There are no financial covenants under these lines of credit with which the Company must comply. At June 30, 2011, the Company had no outstanding borrowings under these lines of credit.

Note 10  Commitments and Contingencies

Operating Leases

The Company leases facilities under operating leases, certain of which require it to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at the
Companys option and usually include escalation clauses linked to inflation. Total future minimum annual rentals under non-cancelable operating leases at June 30, 2011 amounted to $103.0 million. The increase in future minimum annual
rentals as of June 30, 2011 compared with March 31, 2011 was due to approximately $35 million related to new facilities for our Americas operations in Northern California, and approximately $13 million for an expansion of our LifeSize
headquarters in Austin, Texas.

In connection with its leased facilities, the Company has recognized a
liability for asset retirement obligations representing the present value of estimated remediation costs to be incurred at lease expiration. The following table describes changes to the Companys asset retirement obligation liability for the
three months ended June 30, 2011 and 2010 (in thousands):



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##### Table of Contents

|                                                  |  |          |       |  |      |   |       | 
|------------------------------------------------- |  | -------- | ----- |  | ---- | - | ----- | 
|                                                  |  | June 30, |      
|                                                  |  | 2011     |       |  | 2010 |  
|                                                  |  |          |       |  |      |   |       | 
|Asset retirement obligations, beginning of period |  | $        | 1,636 |  |      | $ | 1,374 | 
|Liabilities incurred                              |  |          | -     |  |      |   | 45    | 
|Liabilities settled                               |  |          | (17)  |  |      |   | (117) | 
|Accretion expense                                 |  |          | 19    |  |      |   | 16    | 
|Foreign currency translation                      |  |          | 32    |  |      |   | (33)  | 
|                                                  |  |          |       |  |      |   |       | 
|Asset retirement
obligations, end of period       |  | $        | 1,670 |  |      | $ | 1,285 | 
|                                                  |  |          |       |  |      |   |       | 

Product Warranties

Certain of the Companys products are covered by warranty to be free from defects in material and workmanship for
periods ranging from one year to five years. At the time of sale, the Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation. The
Companys estimate of costs to fulfill its warranty obligations is based on historical experience and expectations of future conditions. When the Company experiences changes in warranty claim activity or costs associated with fulfilling those
claims, the warranty liability is adjusted accordingly. Changes in the Companys warranty liability for the three months ended June 30, 2011 and 2010 were as follows (in thousands):



|                                                  |  |          |         |  |      |   |         | 
|------------------------------------------------- |  | -------- | ------- |  | ---- | - | ------- | 
|                                                  |  | June 30, |        
|                                                  |  | 2011     |         |  | 2010 |  
|                                                  |  |          |         |  |      |   |         | 
|Warranty liability, beginning of period           |  | $        | 4,970   |  |      | $ | 3,002   | 
|Provision for warranties issued during the period |  |          | 4,421   |  |      |   | 5,329   | 
|Settlements made during the period                |  |          | (4,758) |  |      |   | (4,586) | 
|                                                  |  |          |         |  |      |   |         | 
|Warranty liability, end of
period                 |  | $        | 4,633   |  |      | $ | 3,745   | 
|                                                  |  |          |         |  |      |   |         | 

Purchase Commitments

At June 30, 2011, the Company had the following outstanding purchase commitments:



|                           |  |               |         | 
|-------------------------- |  | ------------- | ------- | 
|                           |  | June 30, 2011 |        
|                           |  |               |         | 
|Inventory purchases        |  | $             | 155,298 | 
|Operating expenses         |  |               | 62,196  | 
|Capital expenditures       |  |               | 13,858  | 
|                           |  |               |         | 
|Total purchase
commitments |  | $             | 231,352 | 
|                           |  |               |         | 

Commitments for inventory purchases are made in the normal course of business to original
design manufacturers, contract manufacturers and other suppliers and are expected to be fulfilled by September 2011. Operating expense commitments are for consulting services, marketing arrangements, advertising, outsourced customer services,
information technology maintenance and support services, and other services. Fixed purchase commitments for capital expenditures primarily related to commitments for manufacturing equipment and tooling. Although open purchase orders are considered
enforceable and legally binding, the terms generally allow the Company the option to reschedule and adjust its requirements based on the business needs prior to delivery of goods or performance of services.



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Guarantees

The Company has guaranteed the purchase obligations of some of its contract manufacturers and original design
manufacturers to certain component suppliers. These guarantees generally have a term of one year and are automatically extended for one or more years as long as a liability exists. The amount of the purchase obligations of these manufacturers varies
over time, and therefore the amounts subject to Logitechs guarantees similarly vary. At June 30, 2011, there were no outstanding guaranteed purchase obligations. The maximum potential future payments under two of the three guarantee
arrangements is limited to $30.0 million. The third guarantee is limited to purchases of specified components from the named suppliers. The Company does not believe, based on historical experience and information currently available, that it is
probable that any amounts will be required to be paid under these guarantee arrangements.

Logitech
International S.A., the parent holding company, has guaranteed certain contingent liabilities of various subsidiaries related to specific transactions occurring in the normal course of business. The maximum amount of the guarantees was $54.3 million
as of June 30, 2011. As of June 30, 2011, $9.8 million was outstanding under these guarantees. The parent holding company has also guaranteed the purchases of one of its subsidiaries under three guarantee agreements. Two of these
guarantees do not specify a maximum amount. The third guarantee is limited to $7.0 million. As of June 30, 2011, $5.4 million was outstanding under these guarantees.

Indemnifications

Logitech indemnifies some of its
suppliers and customers for losses arising from matters such as intellectual property rights and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for
damages and expenses, including reasonable attorneys fees. No amounts have been accrued for indemnification provisions at June 30, 2011. The Company does not believe, based on historical experience and information currently available,
that it is probable that any amounts will be required to be paid under its indemnification arrangements.

Letters of Credit

Logitech provides various third parties with irrevocable letters of credit in the normal course of
business to secure its obligations to pay or perform pursuant to the requirements of an underlying agreement or the provision of goods and services. These standby letters of credit are cancelable only at the option of the beneficiary who is
authorized to draw drafts on the issuing bank up to the face amount of the standby letter of credit in accordance with its terms. At June 30, 2011, the Company had $0.6 million of letters of credit in place, of which $0.1 million was
outstanding. These letters of credit relate primarily to equipment purchases by a subsidiary in China, and expire between July and December 2011.

Legal Proceedings

On May 23, 2011, a class
action complaint was filed against Logitech and certain of its officers. This action was filed in the United States District Court for the Southern District of New York on behalf of individuals who purchased Logitech shares between October 28,
2010 and April 1, 2011. The action was transferred to the United States District Court for the Northern District of California on July 28, 2011. The complaint relates to Logitechs disclosure on March 31, 2011 that its results
for fiscal year 2011 would fall below expectations and seeks unspecified monetary damages and other relief against the defendants.

On July 15, 2011, a complaint was filed against Logitech and two of its subsidiaries in the United States District Court for the Central District of California by Universal Electronics, Inc. (UEI).
The complaint alleges that Logitechs Harmony remotes, Logitech Revue for Google TV and other products for the digital home infringe one or more of the seventeen UEI patents asserted in the action, and seeks unspecified monetary damages and
other relief against the defendants.

In addition, the Company is involved in a number of lawsuits and claims
relating to commercial matters that arise in the normal course of business.



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The Company believes these lawsuits and claims are without merit and intends
to vigorously defend against them. However, there can be no assurances that its defenses will be successful, or that any judgment or settlement in any of these lawsuits would not have a material adverse impact on the Companys business,
financial condition, cash flows and results of operations. The Companys accruals for lawsuits and claims as of June 30, 2011 were not material.

Note 11  Shareholders Equity

Share Repurchases

During the three months ended June 30, 2011 and 2010, the Company had the following approved share buyback program in place (in thousands):



|                     |  |                                |  |                 |  |                 |  |                    
|-------------------- |  | ------------------------------ |  | --------------- |  | --------------- |  | -------------------
|Date
of
Announcement |  | Approved        Buyback
Amount |  | Expiration Date |  | Completion Date |  | Amount    Remaining
|                     |  |                                |  |                
|September 2008       |  | $            250,000           |  | September 2012  |  |                |  | $        250,000   

During the three months ended June 30, 2011 and 2010, the Company did not repurchase
any shares under this program.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss were as follows (in thousands):



|                                                           |  |                  |               |  |                   |  |               | 
|---------------------------------------------------------- |  | ---------------- | ------------- |  | ----------------- |  | ------------- | 
|                                                           |  | June 30,    2011 |               |  | March 31,    2011 | 
|Cumulative translation adjustment                          |  |                  | $    (57,311) |  |                   |  | $    (58,641) | 
|Pension liability adjustments, net of tax of $759 and $759 |  |                  | (19,174)      |  |                   |  | (18,073)      | 
|Unrealized gain on investments                             |  |                  | 1,168         |  |                   |  | 1,168         | 
|Net deferred hedging losses                                |  |                  | (2,290)       |  |                   |  | (2,972)       | 
|                                                           |  |                  |               |  |                   |  |               | 
|                                                           |  |                  | $    (77,607) |  |                   |  | $    (78,518) | 
|                                                           |  |                  |               |  |                   |  |               | 

Note 12  Segment Information

Net sales by product family, excluding intercompany transactions, were as follows (in thousands):



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##### Table of Contents

|                              |  |                                     |              |  |      |  |              | 
|----------------------------- |  | ----------------------------------- | ------------ |  | ---- |  | ------------ | 
|                              |  | Three months ended     
   June 30, |             
|                              |  | 2011                                |              |  | 2010 | 
|                              |  |                                    
|Retail - Pointing Devices     |  |                                     | $    132,062 |  |      |  | $    131,846 | 
|Retail - Keyboards & Desktops |  |                                     | 94,596       |  |      |  | 75,281       | 
|Retail - Audio                |  |                                     | 81,565       |  |      |  | 95,646       | 
|Retail - Video                |  |                                     | 49,845       |  |      |  | 47,057       | 
|Retail - Gaming               |  |                                     | 23,392       |  |      |  | 15,451       | 
|Retail - Digital Home         |  |                                     | 13,316       |  |      |  | 28,586       | 
|OEM                           |  |                                     | 49,178       |  |      |  | 58,335       | 
|                              |  |                                     |              |  |      |  |              | 
|Peripherals                   |  |                                     | 443,954      |  |      |  | 452,202      | 
|LifeSize                      |  |                                     | 36,487       |  |      |  | 27,128       | 
|                              |  |                                     |              |  |      |  |              | 
|                              |  |                                    
|Total net sales               |  |                                     | $    480,441 |  |      |  | $    479,330 | 
|                              |  |                                     |              |  |      |  |              | 

The Company has two operating segments, peripherals and video conferencing, based on
product markets and internal organizational structure. The peripherals segment encompasses the design, manufacturing and marketing of peripherals for PCs (personal computers), tablets and other digital platforms. The video conferencing segment
consists of the LifeSize division, and encompasses the design, manufacturing and marketing of LifeSize video conferencing products, infrastructure and services for the enterprise, public sector and other business markets. The Companys
operating segments do not record revenue on sales between segments, as such sales are not material.

Operating
performance measures for the peripherals segment and the video conferencing segment are reported separately to Logitechs Chief Executive Officer, who is considered to be the Companys chief operating decision maker. These operating
performance measures do not include share-based compensation expense, amortization of intangible assets, and assets by operating segment. Share-based compensation expense and amortization of intangible assets are presented in the following financial
information by operating segment as all other. Long-lived assets are presented by geographic region. Net sales, operating income and depreciation and amortization for the Companys operating segments were as follows (in thousands):



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|                                         |  |                             |          |  |      |   |          | 
|---------------------------------------- |  | --------------------------- | -------- |  | ---- | - | -------- | 
|                                         |  | Three months ended June 30, |         
|                                         |  | 2011                        |          |  | 2010 |  
|                                         |  |                            
|Net sales by operating segment           |  |                             |          |  |      |   |          | 
|Peripherals                              |  | $                           | 443,954  |  |      | $ | 452,202  | 
|Video Conferencing                       |  |                             | 36,487   |  |      |   | 27,128   | 
|                                         |  |                             |          |  |      |   |          | 
|Total net sales                          |  | $                           | 480,441  |  |      | $ | 479,330  | 
|                                         |  |                             |          |  |      |   |          | 
|                                         |  |                            
|Operating income (loss) by segment       |  |                             |          |  |      |   |          | 
|Peripherals                              |  | $                           | (26,879) |  |      | $ | 28,550   | 
|Video Conferencing                       |  |                             | (1,808)  |  |      |   | (1,374)  | 
|All other                                |  |                             | (16,345) |  |      |   | (15,373) | 
|                                         |  |                             |          |  |      |   |          | 
|                                         |  |                            
|Total operating income (loss)            |  | $                           | (45,032) |  |      | $ | 11,803   | 
|                                         |  |                             |          |  |      |   |          | 
|                                         |  |                            
|Depreciation and amortization by segment |  |                             |          |  |      |   |          | 
|Peripherals                              |  | $                           | 15,017   |  |      | $ | 14,270   | 
|Video Conferencing                       |  |                             | 4,785    |  |      |   | 4,979    | 
|                                         |  |                             |          |  |      |   |          | 
|Total depreciation and amortization      |  | $                           | 19,802   |  |      | $ | 19,249   | 
|                                         |  |                             |          |  |      |   |          | 

Geographic net sales information in the table below is based on the location of the
selling entity. Long-lived assets, primarily fixed assets, are reported below based on the location of the asset.

Net sales to unaffiliated customers by geographic region were as follows (in thousands):



|                |  |                            |         |  |      |   |         | 
|--------------- |  | -------------------------- | ------- |  | ---- | - | ------- | 
|                |  | Three months
endedJune 30, |        
|                |  | 2011                       |         |  | 2010 |  
|                |  |                           
|Americas        |  | $                          | 225,989 |  |      | $ | 221,966 | 
|EMEA            |  |                            | 130,883 |  |      |   | 154,629 | 
|Asia Pacific    |  |                            | 123,569 |  |      |   | 102,735 | 
|                |  |                            |         |  |      |   |         | 
|                |  |                           
|Total net sales |  | $                          | 480,441 |  |      | $ | 479,330 | 
|                |  |                            |         |  |      |   |         | 

The United States and China each represented more than 10% of the Companys total
consolidated net sales for the three months ended June 30, 2011. No single country other than the United States represented more than 10% of the Companys total consolidated net sales for the three months ended June 30, 2010. One
customer represented 10% and 13% of net sales in the three months ended June 30, 2011 and 2010.

Long-lived assets by geographic region were as follows (in thousands):



|                        |  |              |        |  |               |   |        | 
|----------------------- |  | ------------ | ------ |  | ------------- | - | ------ | 
|                        |  | June 30,2011 |        |  | March 31,2011 |  
|                        |  |             
|Americas                |  | $            | 32,860 |  |               | $ | 34,587 | 
|EMEA                    |  |              | 10,093 |  |               |   | 9,774  | 
|Asia Pacific            |  |              | 43,858 |  |               |   | 45,272 | 
|                        |  |              |        |  |               |   |        | 
|                        |  |             
|Total long-lived assets |  | $            | 86,811 |  |               | $ | 89,633 | 
|                        |  |              |        |  |               |   |        | 

Long-lived assets in China and the United States each represented more than 10% of the
Companys total consolidated long-lived assets at June 30 and March 31, 2011.



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Note 13  Subsequent Events

On July 18, 2011, the Company acquired Mirial S.r.l. con socio unico, a Milan-based privately-held
provider of personal and mobile video conferencing solutions, for a total consideration of $18.7 million (13.2 million). Mirial will be integrated into the LifeSize division, and we expect that its technology will be used to enhance video
connection capabilities on a variety of mobile devices and networks.

On July 27, 2011, Gerald Quindlen
stepped down as President and Chief Executive Officer and resigned from the Board of Directors. Guerrino De Luca, Chairman of the Board, was appointed Acting President and Chief Executive Officer effective July 27, 2011. Under the terms of
Mr. Quindlens employment agreement, subject to his execution of a general release of claims, and that release becoming irrevocable, Mr. Quindlen will be entitled to receive an amount equal to his current annual base salary plus his
current annual targeted bonus amount, which together total $1,856,250, and will be entitled to receive the continuation of health insurance benefits for up to 12 months, estimated at a total of $19,800.



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ITEM 2.  MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in
conjunction with the interim unaudited Consolidated Financial Statements and related notes.

This
Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include, among other things, statements regarding our business
strategy, investment priorities, product plans, goals of targeted pricing actions, trends in consumer demand affecting our products and markets, our current or future revenue mix, our competitive position, and the impact of new product introductions
and product innovation on future performance or anticipated costs and expenses. Forward-looking statements also include, among others, those statements including the words anticipate, believe, could,
estimate, expect, forecast, intend, may, plan, project, predict, should, will, and similar language. These forward-looking
statements involve risks and uncertainties that could cause our actual performance to differ materially from that anticipated in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited
to, those discussed in the section titled Risk Factors in Part II, Item 1A of this quarterly report on Form 10-Q. You should carefully review the risks described in other documents we file from time to time with the Securities
and Exchange Commission, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in fiscal year 2012 and our fiscal year 2011 Form 10-K, which was filed on May 27, 2011, which discuss our business in greater
detail. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release any revisions to the forward-looking
statements or reflect events or circumstances after the date of this document.

Overview of Our Company

Logitech is a world leader in products that connect people to the digital experiences they care about. Spanning multiple
computing, communication and entertainment platforms, we develop and market innovative hardware and software products that enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and video communication
over the Internet, video security and home-entertainment control. We have two operating segments, peripherals and video conferencing.

Our peripherals segment encompasses the design, manufacturing and marketing of peripherals for PCs (personal computers), tablets and other digital platforms. Our products for home and business PCs include
mice, trackballs, keyboards, interactive gaming controllers, multimedia speakers, headsets, webcams, and lapdesks. Our tablet accessories include keyboards, keyboard cases, earphones, wireless speakers and speaker stands. Our Internet communications
products include webcams, headsets, video communications services, and digital video security systems for a home or small business. Our digital music products include speakers, earphones, and custom in-ear monitors. For home entertainment systems,
we offer the Harmony line of advanced remote controls, Squeezebox wireless music solutions and, in the United States, a line of Logitech products for the Google TV platform. For gaming consoles, we offer a range of gaming controllers and
microphones, as well as other accessories.

Our peripherals research and product management teams are
organized along product lines, and are responsible for product strategy, industrial design and development, and technological innovation. Our global marketing and sales organization helps define product opportunities and bring our products to
market, and is responsible for building the Logitech brand and consumer awareness of our products. This organization is comprised of retail and OEM (original equipment manufacturer) sales and marketing groups. Our retail sales and marketing
activities are organized into three geographic regions: Americas (including North and South America), EMEA (Europe-Middle East-Africa), and Asia Pacific (including, among other countries, China, Taiwan, Japan, India and Australia). In addition, we
recently established an organization focused on developing and selling products for enterprise markets, including peripherals for unified communications applications.



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This group combines product management and sales personnel for enterprise products, including our OEM sales team, into one organization.

We sell our peripheral products to a network of distributors and resellers and to OEMs. Our worldwide retail network
includes wholesale distributors, consumer electronics retailers, mass merchandisers, specialty electronics stores, computer and telecommunications stores, value-added resellers and online merchants. Sales of peripherals to our retail channels were
82% of our net sales for the three months ended June 30, 2011 and 85% of our net sales for the fiscal year ended March 31, 2011. The large majority of our revenues have historically been derived from sales of our peripheral products for
use by consumers. Our OEM customers include the majority of the worlds largest PC manufacturers. Sales to OEM customers were 10% and 9% of our net sales for the three months ended June 30, 2011 and the fiscal year ended March 31,
2011.

Our video conferencing segment encompasses the design, manufacturing and marketing of LifeSize video
conferencing products, infrastructure and services for the enterprise, public sector, and other business markets. LifeSize products include scalable HD (high-definition) video communication endpoints, HD video conferencing systems with integrated
monitors, video bridges and other infrastructure software and hardware to support large scale video deployments, and services to support these products. The LifeSize division maintains a separate marketing and sales organization, which sells
LifeSize products and services worldwide. LifeSize product development and product management organizations are separate, but coordinated with our peripherals business, particularly our webcam and video communications groups. We sell our LifeSize
products and services to distributors, value-added resellers, OEMs, and, occasionally, direct enterprise customers. Sales of LifeSize products were 6% of our net sales for the fiscal year ended March 31, 2011 and 8% of our net sales for the
three months ended June 30, 2011. Based on financial measurements for the fiscal year ended March 31, 2011 as evaluated by Logitechs Acting Chief Executive Officer, the LifeSize operating segment does not meet the quantitative
threshold for separate disclosure of financial information required by generally accepted accounting principles in the United States.

We seek to fulfill the increasing demand for interfaces between people and the expanding digital world across multiple platforms and user environments. The interface evolves as platforms, user models and
our target markets evolve. As access to digital information has expanded, we have extended our focus to mobile devices, the digital home, and the enterprise as access points to the Internet and the digital world. All of these platforms require
interfaces that are customized according to how the devices are used. We believe that continued investment in product research and development is critical to creating the innovation required to strengthen our competitive advantage and to drive
future sales growth. We are committed to identifying and meeting current and future customer trends with new and improved product technologies, partnering with others where our strengths are complementary, as well as leveraging the value of the
Logitech and LifeSize brands from a competitive, channel partner and consumer experience perspective. We believe innovation and product quality are important to gaining market acceptance and maintaining market leadership.

We are developing new categories of products, such as tablet accessories, expanding in emerging retail markets, such as
China, Russia and Latin America, and entering new product arenas, such as hosted video conferencing as a service, and peripherals and services for UC (unified communications). As we do so, we are confronting new competitors, many of which have more
experience in the categories or markets and have greater marketing resources and brand name recognition than we have. In addition, because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater
competition in the future from well-established consumer electronics companies in our new categories as well as future ones we might enter. Many of these companies have greater financial, technical, sales, marketing and other resources than we have.

Our peripherals and video conferencing industries are intensely competitive. The peripherals industry is
characterized by platform evolution, short product life cycles, continual performance enhancements, and rapid adoption of technological and product advancements by competitors in our retail markets, and price sensitivity in the OEM market. We
experience aggressive price competition and other promotional activities from our primary competitors and from less established brands, including brands owned by some retail customers known as house brands, in response to declining consumer demand
in both mature retail markets and OEM markets.



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We may also encounter more competition if any of our competitors in one or more categories decide to enter other categories in which we currently operate.

As we address the current and future market challenges we face, we plan to continue to align our resources and prioritize
our investments so that we may develop promising new opportunities and seek to optimize profitability on our current product portfolio. We plan to increase our investments in emerging geographic markets and new categories, including tablet
peripherals, video communications, business-to-business, digital home products, and UC. Although we primarily broaden our product lines organically, we also seek to partner with or acquire, when appropriate, companies that have products, personnel,
and technologies that complement our strategic direction.

We continually evaluate our product offerings and
our strategic direction in light of changing consumer trends and the evolving nature of the interface between the consumer and the digital world.

Summary of Financial Results

Our total net sales for the
three months ended June 30, 2011 of $480.4 million were approximately the same as the total net sales of $479.3 million for the three months ended June 30, 2010. Retail sales were flat although units sold increased 2%, while OEM sales and
units decreased 16% and 22%. Retail sales in our Asia Pacific and Americas regions increased 29% and 1% in the three months ended June 30, 2011 compared with 2010, while weak consumer demand in our EMEA region decreased retail sales by 14% in
the same period. If foreign currency exchange rates had been the same in three months ended June 30, 2011 and 2010, the percentage changes in our constant dollar total net sales would have been an increase of 24% in Asia Pacific, an increase of
1% in the Americas, and a decrease of 23% in EMEA.

Gaming was our best-performing retail product category
during the three months ended June 30, 2011, with sales increasing 51% over the same quarter in 2010 based on strong sales of our steering wheels. Retail sales of keyboards and desktops increased 26%, driven by cordless keyboards and our
initial launch of iPad specific keyboard products. Our weakest performing product category in the three months ended June 30, 2011 was Digital Home, as sales of our Harmony remotes declined 48%, with the steepest sales decline in EMEA.

Our gross margin for the three months ended June 30, 2011 was 26.1% compared with 35.3% in the three
months ended June 30, 2010. The decline in gross margin was primarily due to a $34.1 million valuation adjustment during the quarter to cost of goods sold, reflecting the lower of cost or market on our inventory of Logitech Revue and related
peripherals on hand and at our suppliers related to our decision in early July 2011 to lower the retail price of Logitech Revue from $249 to $99 in the second quarter of our fiscal year 2012. Operating expenses increased 9% in the three months ended
June 30, 2011, primarily due to investments in our LifeSize division and Asia Pacific region, and the impact of foreign currency exchange rates. The combination of flat sales, gross margin decline and increased operating expenses resulted in a
net loss for the three months ended June 30, 2011 of $29.6 million.

Trends in Our Business

Our sales of PC peripherals for use by consumers in the Americas and Europe have historically made up the large majority
of our revenues. The increasing popularity of smaller, mobile computing devices such as tablets and smartphones with touch interfaces and the declining popularity of desktop PCs has rapidly changed the market and usage models for PC peripherals.
Consumer demand for PCs is slowing in our traditional, mature markets such as North America, Western and Nordic Europe, Japan, Australia, and New Zealand, and we believe sales of our PC peripherals in mature markets will decline in fiscal year 2012
and potentially beyond. In response, we intend to increasingly differentiate our approach to PC peripheral categories and markets. We also believe our future sales growth will be significantly impacted by our ability to grow sales in emerging
markets, to increase our sales of products for enterprises, to grow our LifeSize video conferencing division, and to develop sales and innovations for our emerging product categories, such as our products for tablets and the digital home.



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We believe there are continued growth opportunities for our PC peripherals
outside the more mature markets of the Americas and Europe. We are investing significantly in growing the number of our sales, marketing and administrative personnel in China, which currently represents one of our top five countries, by sales. We
are also expanding our presence and our sales in Russia, India and Latin America. We believe these markets offer high potential for us, but growing and conducting business in these markets will continue to require significant investment and
management focus, and our return on investment is not certain due to, among other things, the challenges presented by potentially entrenched local competition, higher credit risks, and cultural differences that affect consumer trends in ways which
may be substantially different from our current major markets.

We also believe there are opportunities to
sell products to consumers to help make their tablets and other mobile devices more productive and comfortable. Our recently-introduced tablet accessories have been well received in limited distribution, and we expect to expand this product line in
the coming quarters. However, consumer acceptance and demand for peripherals for use with tablets and other mobile computing devices is still uncertain.

We are focusing more of our efforts on creating and selling products and services to enterprises, including for use in UC. We believe the preferences of employees increasingly drive companies
choices in the information technologies they deploy to their employee base, and that this consumerization of information technology has made the business market open to embracing consumer technology and design. While our LifeSize division has
extensive experience in developing and selling products for enterprises, we are still in the early stages of our B2B (business-to-business) efforts for our peripherals and related services, and growing our enterprise business will continue to
require investment in product marketing and sales channel development.

Our LifeSize video conferencing
segment represented 8% of our net sales for the three months ended June 30, 2011 and 6% of our net sales for the fiscal year ended March 31, 2011. On July 18, 2011, Logitech acquired Mirial S.r.l. con socio unico, an Italian company
that is a leading provider of personal and mobile video conferencing solutions. Mirial will be integrated into the LifeSize division, and we expect that its technology will be used to enhance video connection capabilities on a variety of mobile
devices and networks. While we expect sales from the LifeSize division to continue to grow faster than our overall sales, we also expect the division will require significant continuing investments in product development and sales and marketing to
stimulate and support future growth.

In October 2010, we introduced our Logitech Revue and related
peripherals for the Google TV platform in the United States. Logitech Revue is a companion box for Google TV software that incorporates Logitechs Harmony remote control technology and enables Google TV software to bring together the Internet
and the television. The Google TV platform has not met widespread U.S. consumer acceptance and sales of Logitech Revue and related products from the launch date through June 30, 2011 have been significantly below our expectations despite
lowering the price to $249 during the quarter. With the goal of accelerating adoption of the Google TV platform, the retail price of Logitech Revue will be reduced from $249 to $99 in our second fiscal quarter, which resulted in a $34.1 million
valuation adjustment to cost of goods sold in the three months ended June 30, 2011. We continue to believe that Google TV and in general the connected TV world represents a strong future growth opportunity in our digital home portfolio.

Sales of our OEM mice and keyboards have historically made up the bulk of our OEM sales. OEM sales accounted
for 10% and 9% of total revenues during the three months ended June 30, 2011 and the fiscal year ended March 31, 2011. In recent years, the shift away from desktop PCs adversely affected our sales of OEM mice and keyboards, which are sold
with name-brand desktop PCs. We expect this trend to continue and for OEM sales to comprise a smaller percentage of our total revenues in the future.



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We continue to evaluate potential acquisitions to enhance the breadth and
depth of our expertise in engineering and other functional areas, our technologies and our product offerings.

Most of our revenue comes from sales to our retail channels, which resell to consumers, retailers and distributors. As a
result, our customers demand for our products depends in substantial part on trends in consumer confidence and consumer spending, as well as the levels of inventory which our customers, and their customers, choose to maintain. We use
sell-through data, which represents sales of our products by our retailer customers to consumers, and by our distributor customers to their customers, along with other metrics to indicate consumer demand for our products. Sell through data is
subject to limitations due to collection methods and the third party nature of the data and thus may not be an entirely accurate indicator of actual consumer demand for our products. In addition, the customers supplying sell through data vary by
geographic region and from period to period, but typically represent a majority of our retail sales.

Although
our financial results are reported in U.S. dollars, approximately 32% of our sales for the three months ended June 30, 2011 were made in currencies other than the U.S. dollar, such as the euro, Chinese renminbi, Japanese yen and Canadian
dollar. Our product costs are primarily in U.S. dollars and Chinese renminbi. Our operating expenses are incurred in U.S. dollars, Chinese renminbi, Swiss francs, euros and, to a lesser extent, 27 other currencies. To the extent that the U.S. dollar
significantly increases or decreases in value relative to the currencies in which our sales and operating expenses are denominated, the reported dollar amounts of our sales and expenses may decrease or increase. For the three months ended
June 30, 2011 the impact of changes in foreign currency exchange rates from net sales and operating expenses decreased our operating loss by approximately 17%.

Our gross margins vary with the mix of products sold, competitive activity, product life cycle, new product
introductions, unit volumes, commodity and supply chain costs, foreign currency exchange rate fluctuations, geographic sales mix, and the complexity and functionality of new product introductions. Changes in consumer demand affect the need for us to
undertake promotional efforts, such as cooperative marketing arrangements, customer incentive programs or other pricing programs, which alter our product gross margins. Gross margins for the three months ended June 30, 2011 were 26.1%, compared
with 35.3% in the three months ended June 30, 2010, primarily due to the $34.1 million valuation adjustment to cost of goods sold related to the reduction in the retail price of Logitech Revue in our second quarter of fiscal year 2012.

Logitech is incorporated in Switzerland but operates in various countries with differing tax laws and rates.
A portion of our income before taxes and the provision for income taxes are generated outside of Switzerland. Therefore, our effective income tax rate depends on the amount of profits generated in each of the various tax jurisdictions in which we
operate. For the three months ended June 30, 2011 and 2010, the income tax benefit was $9.5 million and $5.4 million based on effective income tax rates of 24.4% of pre-tax loss and 38.3% of pre-tax income. The change in the effective income
tax rate for the three months ended June 30, 2011 compared with the three months ended June 30, 2010 was primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates, and a discrete tax
benefit of $7.2 million in the three months ended June 30, 2010 from the closure of income tax audits in certain jurisdictions.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP (generally accepted accounting principles in the United States of America) requires the Company to make
judgments, estimates and assumptions that affect reported amounts of assets, liabilities, net sales and expenses, and the disclosure of contingent assets and liabilities.

We consider an accounting estimate critical if it: (i) requires management to make judgments and estimates about
matters that are inherently uncertain; and (ii) is important to an understanding of Logitechs financial condition and operating results.



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We base our estimates on historical experience and on various other
assumptions we believe to be reasonable under the circumstances. Although these estimates are based on managements best knowledge of current events and actions that may impact the Company in the future, actual results could differ from those
estimates. Management has discussed the development, selection and disclosure of these critical accounting estimates with the Audit Committee of the Board of Directors.

There have been no significant changes during the three months ended June 30, 2011 to the nature of the critical
accounting estimates disclosed in the 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, 2011.

Recent Accounting Pronouncements

In May 2011, the FASB (Financial Accounting Standards Board) issued ASU (Accounting Standards Update) 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 provides a consistent definition of fair value and ensures that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial
Reporting Standards. ASU 2011-04 also changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. ASU 2011-04 is effective during interim and annual periods beginning
after December 15, 2011. The Company will adopt ASU 2011-04 in the fourth quarter of fiscal year 2012. The Company is evaluating the impact of adopting ASU 2011-04, but currently believes there will be no significant impact on its consolidated
financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic
220)Presentation of Comprehensive Income. ASU 2011-05 requires disclosure of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive
income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders equity. ASU 2011-04 is effective for fiscal
years, and interim periods within those years, beginning after December 15, 2011. The Company will adopt ASU 2011-04 in the first quarter of fiscal year 2013. The adoption of this standard will impact only the presentation format of our
consolidated financial statements.

Results of Operations

Net Sales

Net sales by channel for the three
months ended June 30, 2011 and 2010 were as follows (in thousands):



|                |  |                             |         |  |      |   |         |          |  |      
|--------------- |  | --------------------------- | ------- |  | ---- | - | ------- | -------- |  | -----
|                |  | Three Months Ended June 30, |         |  |     
|                |  | 2011                        |         |  | 2010 |   |         | Change %
|                |  |                             |        
|Retail          |  | $                           | 394,776 |  |      | $ | 393,867 |          |  | 0%   
|OEM             |  |                             | 49,178  |  |      |   | 58,335  |          |  | (16%)
|LifeSize        |  |                             | 36,487  |  |      |   | 27,128  |          |  | 34%  
|                |  |                             |         |  |      |   |         |          |  |      
|                |  |                             |        
|Total net sales |  | $                           | 480,441 |  |      | $ | 479,330 |          |  | 0%   
|                |  |                             |         |  |      |   |         |          |  |      

Our total net sales were approximately the same in the fiscal quarters ended
June 30, 2011 and 2010. Growth in retail sales of the Asia Pacific region and the LifeSize division sales were offset by essentially flat retail sales in the Americas region and declines in the EMEA region retail sales and OEM sales.
Approximately 32% and 39% of the Companys total net sales were denominated in currencies other than the U.S. dollar in the three months ended June 30, 2011 and 2010. If foreign currency exchange rates had



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been the same in three months ended June 30, 2011 and 2010, our constant dollar total net sales decrease would have been 4%.

Retail units sold increased 2% and our overall retail average selling price decreased 2% in the three months ended
June 30, 2011 compared with the three months ended June 30, 2010. Sales of our retail products priced above $100 represented approximately 15% of our total retail sales in both the three months ended June 30, 2011 and 2010. Products
priced below $40 represented approximately 57% of retail sales in the fiscal quarter ended June 30, 2011 compared with 61% in the fiscal quarter ended June 30, 2010. If foreign currency exchange rates had been the same in three months
ended June 30, 2011 and 2010, our constant dollar retail sales decrease would have been 5%.

Units sold
to OEM customers declined 22% during the fiscal quarter ended June 30, 2011 compared with the same period in the prior fiscal year, primarily due to decreased sales of our OEM mice and microphones for console singing games. Sales of our OEM
mice decreased 12% and units sold decreased 19% during the quarter compared with the same period in the prior fiscal year. Microphone sales decreased by 91% in the three months ended June 30, 2011 compared with the three months ended
June 30, 2010. Sales of OEM keyboards and desktops increased 17% in dollars during the quarter compared with the prior year, with unit sales essentially flat between the two periods.

LifeSize net sales represent sales of video conferencing units and related software and services. Sales of our LifeSize
products increased 34% in the three months ended June 30, 2011 compared with the three months ended June 30, 2010. Foreign currency exchange rates did not affect LifeSize sales. Although we consider LifeSize a separate operating segment,
based on financial measurements for the fiscal year ended March 31, 2011 and for the three months ended June 30, 2011, and our near-term expectations, the LifeSize segment does not meet the quantitative threshold for separate disclosure of
financial information required by generally accepted accounting principles in the United States.

We refer to
our net sales excluding the impact of foreign currency exchange rates as constant dollar sales. Constant dollar sales are a non-GAAP financial measure, which is information derived from consolidated financial information but not presented in our
financial statements prepared in accordance with U.S. GAAP. Our management uses these non-GAAP measures in its financial and operational decision-making, and believes these non-GAAP measures, when considered in conjunction with the corresponding
GAAP measures, facilitate a better understanding of changes in net sales. Constant dollar sales are calculated by translating prior period sales in each local currency at the current periods average exchange rate for that currency.

Retail Sales by Region

The following table presents the change in retail sales by region for the three months ended June 30, 2011 compared with the three months ended June 30, 2010.



|                   |  |                   
|------------------ |  | ------------------
|                   |  | Three months ended
|                   |  | June 30, 2011     
|                   | 
|EMEA               |  | (14%)             
|Americas           |  | 1%                
|Asia Pacific       |  | 29%               
|                   | 
|Total retail sales |  | 0%                

Retail sales in the EMEA region declined due to weak consumer demand for our products
across much of Western Europe, most notably in the mature markets of Southern Europe such as Italy and Spain, where the economic environment was particularly challenging. The largest retail sales declines in EMEA occurred in the audio, digital home
and pointing devices product families. Our constant dollar retail sales decrease in the EMEA region would have been 23%, if foreign currency exchange rates had been the same in the three months ended June 30, 2011 and 2010. Retail units sold
during the three months ended June 30, 2011



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decreased 13% compared with the prior year, in line with the sales dollar decrease. Despite the weak demand, the overall level of inventory carried by our channel partners declined by 22% from
March 31, 2011 to June 30, 2011. We believe we have largely stabilized the EMEA-specific pricing and channel management programs which created the execution issues that negatively impacted our profitability in the fourth quarter of fiscal
year 2011. However, we believe that full implementation of the necessary operational changes will continue through the remainder of fiscal year 2012 which has resulted in a reduction of our expectation for EMEA sales in fiscal year 2012. During the
three months ended June 30, 2011, we did achieve strong growth in EMEAs emerging markets, particularly Russia, and sell-through in Germany, our largest market in EMEA, improved in the three months ended June 30, 2011 compared with
the three months ended March 31, 2011.

In the Americas region, retail sales increased 1% and retail
units sold were flat in the three months ended June 30, 2011 compared with the same period in the prior fiscal year, primarily due to a 36% sales decline in the digital home product family, which was more than offset by increased sales of
keyboards and desktops, pointing devices, and gaming products. In the digital home category, sales of remote controls in first quarter of fiscal year 2011 included the launch of several new remotes, including the Harmony 300 and the Harmony 650,
whereas the same period in fiscal year 2012 did not include any remote control product launches. In addition, one of our Americas region customers placed a sizable order for remotes in the three months ended March 31, 2011, to support a
promotion campaign, which negatively impacted sales in the three months ended June 30, 2011. The digital home category also includes Logitech Revue and related peripherals, which had slightly negative sales in the quarter, as returns of the
products were higher than the very modest sales. Retail sell-through in the Americas region increased during the fiscal quarter ended June 30, 2011 compared with the prior year. Foreign currency exchange rates had no effect on retail sales in
the region for the three months ended June 30, 2011.

Asia Pacific regions retail sales grew 29%
during the three months ended June 30, 2011 compared with the same period in 2010, driven primarily by sales in China, which increased 89% compared with the prior year. All product lines grew in the three months ended June 30, 2011
compared with the prior year quarter, except digital home. Total retail units sold in the Asia Pacific region increased 31% during the quarter ended June 30, 2011 compared with the prior year. Retail sell-through during the quarter increased
from the prior year in line with the sales growth. If foreign currency exchange rates had been the same in the three months ended June 30, 2011 and 2010, our Asia Pacific constant dollar retail sales increase would have been 24%.

Net Retail Sales by Product Family

Net retail sales by product family during the three months ended June 30, 2011 and 2010 were as follows (in thousands):



|                              |  |                             |         |  |      |   |         |          |  |  |       | 
|----------------------------- |  | --------------------------- | ------- |  | ---- | - | ------- | -------- |  |  | ----- | 
|                              |  | Three Months Ended June 30, |         |  |      |  
|                              |  | 2011                        |         |  | 2010 |   |         | Change % | 
|                              |  |                             |        
|Retail - Pointing Devices     |  | $                           | 132,062 |  |      | $ | 131,846 |          |  |  | 0%    | 
|Retail - Keyboards & Desktops |  |                             | 94,596  |  |      |   | 75,281  |          |  |  | 26%   | 
|Retail - Audio                |  |                             | 81,565  |  |      |   | 95,646  |          |  |  | (15%) | 
|Retail - Video                |  |                             | 49,845  |  |      |   | 47,057  |          |  |  | 6%    | 
|Retail - Gaming               |  |                             | 23,392  |  |      |   | 15,451  |          |  |  | 51%   | 
|Retail - Digital Home         |  |                             | 13,316  |  |      |   | 28,586  |          |  |  | (53%) | 
|                              |  |                             |         |  |      |   |         |          |  |  |       | 
|                              |  |                             |        
|Total net retail sales        |  | $                           | 394,776 |  |      | $ | 393,867 |          |  |  | 0%    | 
|                              |  |                             |         |  |      |   |         |          |  |  |       | 

Logitechs Pointing Devices product family includes our mice, trackballs and other
pointing devices. Keyboards and desktops (mouse and keyboard combined) include cordless and corded keyboards and desktops, and keyboards and keyboard cases for tablets. Audio includes speakers and headset products for the PC, the home, the tablet
and other mobile entertainment platforms, and wireless music systems. Our video product family is comprised of PC webcams and Alert video security systems. Gaming includes



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console and PC gaming peripherals. The Digital Home product family combines our advanced Harmony Remote controls, Logitech Revue with Google TV, and peripherals associated with the Google TV
platform. Net sales reflect accruals for product returns, cooperative marketing arrangements, customer incentive programs and pricing programs.

Retail Pointing Devices

A decline in dollar sales
of pointing devices in our EMEA region for the first quarter of fiscal year 2012 was offset by growth in the Americas and Asia Pacific regions. Retail unit sales of pointing devices increased 9% in the three months ended June 30, 2011 compared
with the same period in 2010. Dollar sales of cordless mice increased 10%, while units grew 24% in the quarter. We achieved strong sales and unit growth in both our high-end as well as our value-priced cordless mice. Dollar sales of cordless mice
grew in both the Americas and Asia Pacific regions, with sales in China more than doubling. Unit sales of cordless mice grew in all three regions, with the strongest growth in China. Sales and units of corded mice decreased 19% and 6% in the three
months ended June 30, 2011 compared with the prior fiscal year, with dollar sales declines in all regions.

Retail
Keyboards and Desktops

Retail unit sales of keyboards and desktops increased 16% during the quarter
ended June 30, 2011 compared with 2010, primarily due to our cordless keyboards and desktops. Sales of cordless keyboards more than doubled in dollars compared with the prior year, led by the Wireless Solar Keyboard K750. Sales of cordless
desktops increased 2% in dollars during the three months ended June 30, 2011 compared with 2010. We also launched our iPad specific keyboard products in limited distribution, with encouraging results during the quarter ended June 30, 2011.
This new tablet accessories product line includes the Keyboard Case for iPad2 and the Tablet Keyboard for iPad, with additional products planned for launch in future quarters.

Retail Audio

Retail audio unit sales decreased 13%
in the three months ended June 30, 2011 compared with the same period in the prior year. Dollar sales growth in the Asia Pacific region was more than offset by declines in EMEA and the Americas. PC speaker sales decreased 12% in dollars and 5%
in units. Sales of our iPod speakers decreased 15% in dollars and 22% in units in the three months ended June 30, 2011 compared with the prior year. Partially offsetting the sales declines in speakers, our Ultimate Ears line of earphones grew
12% in dollars during the quarter.

Retail Video

Our retail sales in the Video category increased 6%, while units decreased 9% in the quarter ended June 30, 2011
compared with 2010. The growth in sales was driven entirely by the Logitech Alert line of digital video security systems. Webcam sales declined 7% in dollars and 10% in units in the three months ended June 30, 2011 compared with the same period
in 2010, with growth in the Asia Pacific region offset by the sales decline in the Americas region.

Retail Gaming

Retail sales of our gaming peripherals grew 51%, while unit sales decreased 7% during the three
months ended June 30, 2011 compared with the same period in 2010. The dollar sales growth was due to strong sales of our steering wheels. Steering wheels have a higher selling price than our other gaming products, which explains the decline in
unit sales. PC gaming sales increased 53% in dollars and decreased 4% in units during the three months ended June 30, 2011 compared with the three months ended June 30, 2010. Console gaming sales increased 69% in dollars and decreased 15%
in units in the same periods.



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Retail Digital Home

Retail sales in our digital home category, which includes Harmony remotes, Logitech Revue, and our Google TV peripherals,
declined 53% during the quarter ended June 30, 2011 compared with the same quarter in the prior year. Sales of Harmony remotes decreased 48%, with the largest decline in EMEA due to slow moving channel inventory as a result of weak
macroeconomic conditions in several countries, combined with the impact of execution issues in EMEA-specific pricing and channel management programs. The sales decrease in the Americas region was attributable to higher sales in the three months
ended June 30, 2010 from the successful launch of several new remotes, and a sizable order from one customer to support a promotion campaign, which occurred in the three months ended March 31, 2011 rather than the three months ended
June 30, 2011.

Gross Profit

Gross profit for the three months ended June 30, 2011 and 2010 was as follows (in thousands):



|                   |  |                             |         |  |      |   |         |        |  |  |       | 
|------------------ |  | --------------------------- | ------- |  | ---- | - | ------- | ------ |  |  | ----- | 
|                   |  | Three Months Ended June 30, |         |  |      |  
|                   |  | 2011                        |         |  | 2010 |   |         | Change | 
|                   |  |                             |        
|Net sales          |  | $                           | 480,441 |  |      | $ | 479,330 |        |  |  | 0%    | 
|Cost of goods sold |  |                             | 354,834 |  |      |   | 310,301 |        |  |  | 14%   | 
|                   |  |                             |         |  |      |   |         |        |  |  |       | 
|                   |  |                             |        
|Gross profit       |  | $                           | 125,607 |  |      | $ | 169,029 |        |  |  | (26%) | 
|                   |  |                             |         |  |      |   |         |        |  |  |       | 
|Gross margin       |  |                             | 26.1%   |  |      |   | 35.3%   |        |  |  |       | 

Gross profit consists of net sales, less cost of goods sold which includes materials,
direct labor and related overhead costs, costs of manufacturing facilities, costs of purchasing components from outside suppliers, distribution costs, write-down of inventories and amortization of intangible assets.

Gross margin declined to 26.1% in the three months ended June 30, 2011 compared with 35.3% in the same period in the
prior year, primarily due to a $34.1 million valuation adjustment during the quarter to cost of goods sold, reflecting the lower of cost or market on our inventory of Logitech Revue and related peripherals on hand and at our suppliers. Product mix
in retail sales also contributed to the lower gross margin in the first quarter of fiscal year 2012.

Operating Expenses

Operating expenses for the three months ended June 30, 2011 and 2010 were as follows (in
thousands):



|                           |  |                             |         |  |      |   |         |        |  |  |     | 
|-------------------------- |  | --------------------------- | ------- |  | ---- | - | ------- | ------ |  |  | --- | 
|                           |  | Three Months Ended June 30, |         |  |      |  
|                           |  | 2011                        |         |  | 2010 |   |         | Change | 
|                           |  |                             |        
|Marketing and selling      |  | $                           | 99,793  |  |      | $ | 91,477  |        |  |  | 9%  | 
|% of net sales             |  |                             | 21%     |  |      |   | 19%     |        |  |  |     | 
|Research and development   |  |                             | 39,981  |  |      |   | 38,389  |        |  |  | 4%  | 
|% of net sales             |  |                             | 8%      |  |      |   | 8%      |        |  |  |     | 
|General and administrative |  |                             | 30,865  |  |      |   | 27,360  |        |  |  | 13% | 
|% of net sales             |  |                             | 6%      |  |      |   | 6%      |        |  |  |     | 
|                           |  |                             |         |  |      |   |         |        |  |  |     | 
|                           |  |                             |        
|Total operating expenses   |  | $                           | 170,639 |  |      | $ | 157,226 |        |  |  | 9%  | 
|                           |  |                             |         |  |      |   |         |        |  |  |     | 

Approximately half of the increase in total operating expenses in the three months ended
June 30, 2011 compared with the same period in the prior year was due to investments in marketing, selling, research, and development related to our LifeSize division.

We refer to our operating expenses excluding the impact of foreign currency exchange rates as constant dollar operating
expenses. Constant dollar operating expenses are a non-GAAP financial measure,



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which is information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. GAAP. Our management uses these non-GAAP
measures in its financial and operational decision-making, and believes these non-GAAP measures, when considered in conjunction with the corresponding GAAP measures, facilitate a better understanding of changes in operating expenses. Constant dollar
operating expenses are calculated by translating prior period operating expenses in each local currency at the current periods average exchange rate for that currency.

Marketing and Selling

Marketing and selling
expense consists of personnel and related overhead costs, corporate and product marketing, promotions, advertising, trade shows, customer and technical support and facilities costs.

Marketing and selling expenses increased 9% in the three months ended June 30, 2011 compared with the same period in
the prior fiscal year primarily due to additional sales and marketing headcount for LifeSize, B2B and Asia Pacific region, and additional trade show and public relations initiatives for our LifeSize products. Stock compensation costs also increased,
due to the use of RSUs (restricted stock units) instead of stock options. RSUs are less dilutive to shareholders because in general a smaller number of RSUs is granted, since the value at grant of RSUs is generally greater than the value of stock
options. Settlement of a customer bankruptcy dispute also increased expenses in the three months ended June 30, 2011 compared with 2010. Offsetting these increases were decreases in bonuses, advertising expense, bad debt expense and sales
warehouse expense.

The impact of foreign currency exchange rates also caused sales and marketing expenses to
increase. If foreign currency exchange rates had been the same in the three months ended June 30, 2011 and 2010, the percentage change in constant dollar marketing and selling expense for the three months ended June 30, 2011 would have
been 4%.

Research and Development

Research and development expense consists of personnel and related overhead costs, contractors and outside consultants,
supplies and materials, equipment depreciation and facilities costs, all associated with the design and development of new products and enhancements of existing products.

The 4% increase in research and development expense for the three months ended June 30, 2011 compared with the same
period in the prior year was primarily due to investment in our LifeSize division and B2B products, and packaging evaluations. Research and development expense growth for our peripherals division was approximately the same as the change in retail
peripherals sales.

If foreign currency exchange rates had been the same in the three months ended
June 30, 2011 and 2010, there would have been no change in constant dollar research and development expense.

General and Administrative

General and
administrative expense consists primarily of personnel and related overhead and facilities costs for the finance, information systems, executive, human resources and legal functions.

General and administrative expense increased 13% in the three months ended June 30, 2011 compared with the same
period last year. The impact of foreign currency exchange rates caused general and administrative expense to increase. If foreign currency exchange rates had been the same in the three months ended June 30, 2011 and 2010, the percentage change
in constant dollar general and administrative expense would have been 8%. Expenses increased due to higher personnel-related expenses, increased stock compensation expense from the use of RSUs, recruiting fees and increased litigation expenses.
These increases were partially offset by lower bonus expense.



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Interest Income, Net

Interest income and expense for the three months ended June 30, 2011 and 2010 were as follows (in thousands):



|                     |  |                             |     |  |      |   |     |        |  |  |      | 
|-------------------- |  | --------------------------- | --- |  | ---- | - | --- | ------ |  |  | ---- | 
|                     |  | Three Months Ended June 30, |     |  |      |  
|                     |  | 2011                        |     |  | 2010 |   |     | Change | 
|                     |  |                             |    
|Interest income      |  | $                           | 690 |  |      | $ | 523 |        |  |  | 32%  | 
|Interest expense     |  |                             | -   |  |      |   | (2) |        |  |  | 100% | 
|                     |  |                             |     |  |      |   |     |        |  |  |      | 
|                     |  |                             |    
|Interest income, net |  | $                           | 690 |  |      | $ | 521 |        |  |  | 32%  | 
|                     |  |                             |     |  |      |   |     |        |  |  |      | 

Interest income increased slightly during the three months ended June 30, 2011
compared with the same period in the prior fiscal year due to slightly higher interest rates.

Other Income, Net

Other income and expense for the three months ended June 30, 2011 and 2010 were as follows (in thousands):



|                                                        |  |                             |       |  |      |   |       |        |  |  |        | 
|------------------------------------------------------- |  | --------------------------- | ----- |  | ---- | - | ----- | ------ |  |  | ------ | 
|                                                        |  | Three Months Ended June 30, |       |  |      |  
|                                                        |  | 2011                        |       |  | 2010 |   |       | Change | 
|                                                        |  |                             |      
|Foreign currency exchange gains, net                    |  | $                           | 340   |  |      | $ | 360   |        |  |  | (6%)   | 
|Gain on sale of property and plant                      |  |                             | 4,904 |  |      |   | 838   |        |  |  | 485%   | 
|Investment income related to deferred compensation plan |  |                             | 188   |  |      |   | 435   |        |  |  | (57%)  | 
|Other, net                                              |  |                             | (241) |  |      |   | 163   |        |  |  | (248%) | 
|                                                        |  |                             |       |  |      |   |       |        |  |  |        | 
|                                                        |  |                             |      
|Other income, net                                       |  | $                           | 5,191 |  |      | $ | 1,796 |        |  |  | 189%   | 
|                                                        |  |                             |       |  |      |   |       |        |  |  |        | 

Foreign currency exchange gains or losses relate to balances denominated in currencies
other than the functional currency of a particular subsidiary, to the sale of currencies, and to gains or losses recognized on foreign exchange forward contracts.

The gain on sale of building for the three months ended June 30, 2011 relates to the sale of an unused manufacturing
facility in China. The gain on sale of building for the three months ended June 30, 2010 relates to the sale of our building in Romanel, Switzerland.

Investment income for the three months ended June 30, 2011 represents earnings and realized and unrealized gains on trading investments related to a deferred compensation plan offered by one of our
subsidiaries. Investment income for the three months ended June 30, 2010 represents changes in the cash surrender value of Company-owned life insurance contracts, related to the same management deferred compensation plan. In December 2010, the
Company surrendered the life insurance contracts for cash, and invested the proceeds in a portfolio of mutual funds, which are classified as trading investments.

Provision for Income Taxes

The provision for
income taxes and effective tax rates for the three months ended June 30, 2011 and 2010 were as follows (in thousands):



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|                          |  |                             |         |  |      |   |         | 
|------------------------- |  | --------------------------- | ------- |  | ---- | - | ------- | 
|                          |  | Three Months Ended June 30, |        
|                          |  | 2011                        |         |  | 2010 |  
|                          |  |                            
|Benefit from income taxes |  | $                           | (9,545) |  |      | $ | (5,402) | 
|Effective income tax rate |  |                             | 24.4%   |  |      |   | (38.3%) | 

The provision for income taxes consists of income and withholding taxes. Logitech
operates in multiple jurisdictions and its profits are taxed pursuant to the tax laws of these jurisdictions. The Companys effective income tax rate may be affected by changes in or interpretations of tax laws in any given jurisdiction,
utilization of net operating loss and tax credit carryforwards, changes in geographical mix of income and expense, and changes in managements assessment of matters such as the ability to realize deferred tax assets.

The change in the effective income tax rate for the three months ended June 30, 2011 compared with the three months
ended June 30, 2010 is primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates, and a discrete tax benefit of $7.2 million in the three months ended June 30, 2010 from the closure of
income tax audits in certain jurisdictions.

Current deferred tax assets increased from $27.0 million as of
March 31, 2011 to $51.8 million as of June 30, 2011. Approximately $12.0 million of the increase relates to the reclassification of deferred tax assets from non-current to current, primarily due to the valuation adjustment to cost of goods
sold for the planned price reduction on Logitech Revue and related peripherals. The remaining increase is primarily due to the tax benefit from operating losses generated in the three month period ended June 30, 2011.

As of June 30 and March 31, 2011, the total amount of unrecognized tax benefits and related accrued interest
and penalties due to uncertain tax positions was $137.7 million and $138.1 million, of which $117.0 million and $118.2 million would affect the effective income tax rate if recognized. The decline in the income tax liability associated with
uncertain tax benefits is primarily due to the expiration of statutes of limitations, offset by the impact of foreign currency exchange rates and the accrual of interest expense.

The Company continues to recognize interest and penalties related to unrecognized tax positions in income tax expense. As
of June 30 2011, accrued interest and penalties related to uncertain tax positions increased to $8.1 million from $8.0 million as of March 31, 2011.

The Company files Swiss and foreign tax returns. For all these tax returns, the Company is generally not subject to tax examinations for years prior to 1999. During the third quarter of fiscal year 2011,
the U.S. Internal Revenue Service expanded its examination of the Companys U.S. subsidiary to include fiscal years 2008 and 2009 in addition to fiscal years 2006 and 2007. The Company is also under examination in other tax jurisdictions. At
this time it is not possible to estimate the potential impact that these examinations may have on income tax expense. If the examinations are resolved unfavorably, there is a possibility they may have a material impact on our results of operations.

Although the Company has adequately provided for uncertain tax positions, the provisions on these positions may change as
revised estimates are made or the underlying matters are settled or otherwise resolved. Although the timing of the resolution or closure on audits is highly uncertain, the Company does not believe it is reasonably possible that the unrecognized tax
benefits would materially change in the next twelve months.



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Liquidity and Capital Resources

Cash Balances, Available Borrowings, and Capital Resources

At June 30, 2011, our working capital was $607.8 million, compared with $381.7 million at June 30, 2010. The increase in working capital over the prior year was due to higher cash, receivable,
and inventory balances.

During the three months ended June 30, 2011, operating activities provided net
cash of $3.7 million. Our largest sources of operating cash flows were decreased accounts receivable and increased accounts payable balances compared with March 31, 2011, offset by increases in inventory and deferred tax assets. Net cash used
in investing activities was $5.7 million. We invested $10.6 million in capital expenditures for tooling, equipment, computer hardware, and software, which was partially offset by proceeds of $4.9 million from the sale of one of our buildings. Net
cash provided by financing activities was $0.5 million, primarily from proceeds from employee stock purchases and the exercise of stock options.

At June 30, 2011, we had cash and cash equivalents of $476.4 million, comprised of bank demand deposits and short-term time deposits. Cash and cash equivalents are carried at cost, which is
equivalent to fair value.

The Company has credit lines with several European and Asian banks totaling $150.3
million as of June 30, 2011. As is common for businesses in European and Asian countries, these credit lines are uncommitted and unsecured. Despite the lack of formal commitments from the banks, we believe that these lines of credit will
continue to be made available because of our long-standing relationships with these banks and our current financial condition. At June 30, 2011, there were no outstanding borrowings under these lines of credit. There are no financial covenants
under these facilities.

We provide various third parties with irrevocable letters of credit in the normal
course of business to secure our obligations to pay or perform pursuant to the requirements of an underlying agreement or the provision of goods and services. These standby letters of credit are cancelable only at the option of the beneficiary who
is authorized to draw drafts on the issuing bank up to the face amount of the standby letter of credit in accordance with its terms. At June 30, 2011, we had $0.6 million of letters of credit in place, of which $0.1 million was outstanding.
These letters of credit relate primarily to equipment purchases by a subsidiary in China, and expire between July and December 2011.

The Company has financed its operating and capital requirements primarily through cash flow from operations and, to a lesser extent, from capital markets and bank borrowings. Our normal short-term
liquidity and long-term capital resource requirements are provided from three sources: cash flow generated from operations, cash and cash equivalents on hand, and borrowings, as needed, under our credit facilities.

Based upon our available cash balances and credit lines, and the trend of our historical cash flow generation, we believe
we have sufficient liquidity to fund operations for the foreseeable future.

Cash Flow from Operating Activities

The following table presents selected financial information and statistics as of June 30, 2011 and 2010 (dollars in
thousands):



|                                           |  |          |         |  |      |   |         | 
|------------------------------------------ |  | -------- | ------- |  | ---- | - | ------- | 
|                                           |  | June 30, |        
|                                           |  | 2011     |         |  | 2010 |  
|                                           |  |         
|Accounts receivable, net                   |  | $        | 241,456 |  |      | $ | 213,567 | 
|Inventories                                |  |          | 317,548 |  |      |   | 279,800 | 
|Working capital                            |  |          | 607,809 |  |      |   | 381,742 | 
|Days sales in accounts receivable (DSO)(1) |  |          | 45 days |  |      |   | 40 days | 
|Inventory turnover (ITO)(2)                |  |          | 4.5x    |  |      |   | 4.4x    | 
|Net cash provided by operating activities  |  | $        | 3,744   |  |      | $ | 6,118   | 







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|(1) | DSO is determined using ending accounts receivable as of the most recent quarter-end and net sales for the most recent quarter.
|--- | -------------------------------------------------------------------------------------------------------------------------------

|(2) | ITO is determined using ending inventories and annualized cost of goods sold (based on the most recent quarterly cost of goods sold).
|--- | -------------------------------------------------------------------------------------------------------------------------------------

Net cash provided by operating activities decreased to $3.7 million in the three months
ended June 30, 2011, from $6.1 million for the same period in the prior year. The primary drivers of the decline in operating cash flows were the net loss of $29.6 million in the three months ended June 30, 2011 compared with net income of
$19.5 million in the three months ended June 30, 2010, and a lower increase in current liabilities, offset by the $34.1 million inventory valuation adjustment and by a decrease in accounts receivable when compared with the change in that
balance during the three months ended June 30, 2010.

DSO for the quarter was five days higher than the
same period in the prior year, primarily due to greater sales linearity in the three months ended June 30, 2010. Typical payment terms require customers to pay for product sales generally within 30 to 60 days. However, terms may vary by
customer type, by country and by selling season. Extended payment terms are sometimes offered to a limited number of customers during the second and third fiscal quarters. The Company does not modify payment terms on existing receivables, but may
offer discounts for early payment.

Inventory turns for the three months ended June 30, 2011 were
approximately the same as in the three months ended June 30, 2010.

Cash Flow from Investing Activities

Cash flows from investing activities during the three months ended June 30, 2011 and 2010 were as follows (in
thousands):



|                                           |  |                             |          |  |      |   |          | 
|------------------------------------------ |  | --------------------------- | -------- |  | ---- | - | -------- | 
|                                           |  | Three months ended June 30, |         
|                                           |  | 2011                        |          |  | 2010 |  
|                                           |  |                            
|Purchases of property, plant and equipment |  | $                           | (10,561) |  |      | $ | (11,918) | 
|Proceeds from sale of property and plant   |  |                             | 4,904    |  |      |   | 2,688    | 
|Purchases of trading investments           |  |                             | (3,545)  |  |      |   | -        | 
|Proceeds from sale of trading investments  |  |                             | 3,500    |  |      |   | -        | 
|                                           |  |                             |          |  |      |   |          | 
|                                           |  |                            
|Net cash used in investing activities      |  | $                           | (5,702)  |  |      | $ | (9,230)  | 
|                                           |  |                             |          |  |      |   |          | 

Our capital expenditures during the three months ended June 30, 2011 and 2010 were
principally for computer hardware and software purchases, equipment, and normal expenditures for tooling.

Proceeds from the sale of property, plant and equipment were related to the sale of an unused manufacturing facility in
China in the three months ended June 30, 2011 and the sale of our building in Romanel, Switzerland in the three months ended June 30, 2010.

The purchases and sales of trading investments in the three months ended June 30, 2011 represent mutual fund activity directed by participants in a deferred compensation plan offered by one of the
Companys subsidiaries. The mutual funds are held by a Rabbi Trust. In the three months ended June 30, 2010, the deferred compensation plan was invested in life insurance contracts.

Cash Flow from Financing Activities

The following
table presents information on our cash flows from financing activities during the three months ended June 30, 2011 and 2010 (in thousands):



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|                                                                          |  |                             |       |  |      |   |       | 
|------------------------------------------------------------------------- |  | --------------------------- | ----- |  | ---- | - | ----- | 
|                                                                          |  | Three months ended June 30, |      
|                                                                          |  | 2011                        |       |  | 2010 |  
|                                                                          |  |                            
|Proceeds from sale of shares upon exercise of options and purchase rights |  | $                           | 607   |  |      | $ | 5,329 | 
|Tax withholdings related to net share settlements of RSUs                 |  |                             | (176) |  |      |   | (223) | 
|Excess tax benefits from share-based compensation                         |  |                             | 24    |  |      |   | 421   | 
|                                                                          |  |                             |       |  |      |   |       | 
|                                                                          |  |                            
|Net cash provided by financing activities                                 |  | $                           | 455   |  |      | $ | 5,527 | 
|                                                                          |  |                             |       |  |      |   |       | 

During the three months ended June 30, 2011 and 2010, cash of $0.6 million and $5.3
million was provided by the sale of shares upon exercise of options and purchase rights pursuant to the Companys stock plans. The payment of tax withholdings related to net share settlements of RSUs (restricted stock units) required the use of
$0.2 million in cash in both three month periods ended June 30, 2011 and 2010. Tax benefits recognized on the exercise of share-based payment awards provided $0.02 million and $0.4 million in the three months ended June 30, 2011 and 2010.

Cash Outlook

We have financed our operations and capital requirements primarily through cash flow from operations and, to a lesser extent, capital markets and bank borrowings. Our working capital requirements and
capital expenditures may increase to support future expansion of Logitech operations. Future acquisitions or expansion of our operations may be significant and may also require the use of cash. In addition, uncertainty regarding future global
economic conditions could adversely affect our operations and require the use of cash.

In connection with the
acquisition of LifeSize Communications, Inc. in December 2009, Logitech agreed to establish a cash retention and incentive plan for certain LifeSize employees, linked to the achievement of LifeSize performance targets. The duration of the
plans performance period is two years, from January 1, 2010 to December 31, 2011. The total available cash incentive is $9.0 million over the two year performance period. Approximately $6.8 million is accrued as of June 30,
2011.

In September 2008, our Board of Directors approved a new share buyback program, which authorizes the
Company to invest up to $250 million to purchase its own shares. As of August 8, 2011, we have not started repurchases under the September 2008 program.

On October 12, 2010, the legislature of the U.S. state of California enacted a fiscal budget bill which extended the suspension of net operating losses for tax years beginning on or after
January 1, 2008 through January 1, 2012. The legislation also affects the methodology used by corporate taxpayers to apportion income to California and modifies the large corporate underpayment penalty effective for our fiscal years ending
March 31, 2011 and 2012. Although the Company has significant operations in California, we believe these changes will not have a material impact on our results of operations, cash flows or financial condition.

During the third quarter of fiscal year 2011, the U.S. Internal Revenue Service expanded its examination of the
Companys U.S. subsidiary to include fiscal years 2008 and 2009 in addition to fiscal years 2006 and 2007. The Company is also under examination in other tax jurisdictions. As of June 30, 2011, we are not able to estimate the potential
future liability, if any, which may result from these examinations. If the examinations are resolved unfavorably, there is a possibility they may have a material impact on our results of operations.

Other contractual obligations and commitments of the Company which require cash are described in the following sections.



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Over the past several years, we have generated positive cash flow from our
operating activities, including cash from operations of $156.6 million in fiscal year 2011 and $3.7 million in the three months ended June 30, 2011. We believe that our cash and cash equivalents, cash flow generated from operations, and
available borrowings under our bank lines of credit will be sufficient to fund our operations for the foreseeable future.

Contractual
Obligations and Commitments

As of June 30, 2011, the Companys outstanding contractual
obligations and commitments included: (i) facilities leased under operating lease commitments, (ii) purchase commitments and obligations, (iii) long-term liabilities for income taxes payable, and (iv) defined benefit pension plan
and non-retirement post-employment benefit obligations. The following summarizes our contractual obligations and commitments at June 30, 2011 (in thousands):



|                                              |  |               |         | 
|--------------------------------------------- |  | ------------- | ------- | 
|                                              |  | June 30, 2011 |        
|                                              | 
|Operating leases                              |  | $             | 103,049 | 
|Purchase commitments - inventory              |  |               | 155,298 | 
|Purchase obligations - capital expenditures   |  |               | 13,858  | 
|Purchase obligations - operating expenses     |  |               | 62,196  | 
|Income taxes payable - non-current            |  |               | 131,672 | 
|Obligation for deferred compensation          |  |               | 13,837  | 
|Pension and post-employment obligations       |  |               | 28,068  | 
|Other long-term liabilities                   |  |               | 15,482  | 
|                                              |  |               |         | 
|                                              | 
|Total contractual obligations and commitments |  | $             | 523,460 | 
|                                              |  |               |         | 

Operating Leases

The Company leases facilities under operating leases, certain of which require it to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at the
Companys option and usually include escalation clauses linked to inflation. The remaining terms on our non-cancelable operating leases expire in various years through 2028. Our asset retirement obligations on these leases as of June 30,
2011 were $1.7 million.

The increase in operating lease commitments to $103.0 million as of June 30,
2011 compared with $72.6 million as of March 31, 2011 was due to approximately $35 million related to new facilities for our Americas operations in Northern California, and approximately $13 million for an expansion of our LifeSize headquarters
in Austin, Texas.

Purchase Commitments

At June 30, 2011, we have fixed purchase commitments of $155.3 million for inventory purchases made in the normal
course of business to original design manufacturers, contract manufacturers and other suppliers, which are expected to be fulfilled by September 30, 2011. We also had commitments of $62.2 million for consulting services, marketing arrangements,
advertising, outsourced customer services, information technology maintenance and support services, and other services. Fixed purchase commitments for capital expenditures amounted to $13.9 million at June 30, 2011, and primarily relate to
commitments for manufacturing equipment and tooling. We expect to continue making capital expenditures in the future to support product development activities and ongoing and expanded operations. Although open purchase commitments are considered
enforceable and legally binding, the terms generally allow us the option to reschedule and adjust our requirements based on business needs prior to delivery of goods or performance of services.



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Income Taxes Payable

At June 30, 2011, we had $131.7 million in non-current income taxes payable, including interest and penalties,
related to our income tax liability for recognized uncertain tax positions, compared with $132.0 million in non-current income taxes payable as of March 31, 2011. The decline in the income tax liability associated with uncertain tax benefits is
due to the expiration of statutes of limitations, offset by the impact of foreign currency exchange rates and the accrual of interest expense.

The Company files Swiss and foreign tax returns. For all these tax returns, the Company is generally not subject to tax examinations for years prior to 1999. During the third quarter of fiscal year 2011,
the U.S. Internal Revenue Service expanded its examination of the Companys U.S. subsidiary to include fiscal years 2008 and 2009 in addition to fiscal years 2006 and 2007. The Company is also under examination in other tax jurisdictions. As of
June 30, 2011, we are not able to estimate the potential future liability, if any, which may result from these examinations. If the examinations are resolved unfavorably, there is a possibility they may have a material impact on our results of
operations.

Obligation for Deferred Compensation

At June 30, 2011, we had $13.8 million in liabilities related to a deferred compensation plan offered by one of the
Companys subsidiaries. See Note 4  Employee Benefit Plans for more information.

Pension and Post-Employment Obligations

At June 30, 2011, we had $28.1 million in non-current liabilities related to our defined benefit
pension plans and non-retirement post-employment benefit obligations. See Note 4  Employee Benefit Plans for more information.

Other Contractual Obligations and Commitments

For further detail about our contractual obligations and commitments, please refer to our Annual Report on Form 10-K for the fiscal year ended March 31, 2011.

Off-Balance Sheet Arrangements

The Company has not entered into any transactions with unconsolidated entities 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 financing, liquidity, market risk or credit risk support to the Company.

Guarantees

The Company has guaranteed the purchase obligations of some of its contract manufacturers and original design manufacturers to certain component suppliers. These guarantees generally have a term of one
year and are automatically extended for one or more years as long as a liability exists. The amount of the purchase obligations of these manufacturers varies over time, and therefore the amounts subject to the Logitechs guarantees similarly
vary. At June 30, 2011, there were no outstanding guaranteed purchase obligations. The maximum potential future payments under two of the three guarantee arrangements is limited to $30.0 million. The third guarantee is limited to purchases of
specified components from the named suppliers. We do not believe, based on historical experience and information available as of the date of this report, that it is probable that any amounts will be required to be paid under these guarantee
arrangements.

Logitech International S.A., the parent holding company, has guaranteed certain contingent
liabilities of various subsidiaries related to specific transactions occurring in the normal course of business. The maximum amount of the guarantees was $54.3 million as of June 30, 2011. As of June 30, 2011, $9.8 million was outstanding
under these guarantees.



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The parent holding company has also guaranteed the purchases of one of its subsidiaries under three guarantee arrangements. Two of these guarantees do not specify a maximum amount. The third
guarantee is limited to $7.0 million. As of June 30, 2011, $5.4 million was outstanding under these guarantees.

Indemnifications

Logitech indemnifies some of its suppliers and customers for losses arising from matters such as
intellectual property rights and safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys fees. In
addition, we have entered into indemnification agreements with our officers and directors, and the bylaws of our subsidiaries contain similar indemnification obligations to our agents. No amounts have been accrued for indemnification provisions as
of June 30, 2011. We do not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these indemnification arrangements.

Letters of Credit

Logitech provides various third parties with irrevocable letters of credit in the normal course of business to secure its obligations to pay or perform pursuant to the requirements of an underlying
agreement or the provision of goods and services. These standby letters of credit are cancelable only at the option of the beneficiary who is authorized to draw drafts on the issuing bank up to the face amount of the standby letter of credit in
accordance with its terms. At June 30, 2011, the Company had $0.6 million of letters of credit in place, of which $0.1 million was outstanding. These letters of credit relate primarily to equipment purchases by a subsidiary in China, and expire
between July and December 2011.

Legal Proceedings

On May 23, 2011, a class action complaint was filed against Logitech and certain of its officers. This action was
filed in the United States District Court for the Southern District of New York on behalf of individuals who purchased Logitech shares between October 28, 2010 and April 1, 2011. The action was transferred to the United States District
Court for the Northern District of California on July 28, 2011. The complaint relates to Logitechs disclosure on March 31, 2011 that its results for fiscal year 2011 would fall below expectations and seeks unspecified monetary
damages and other relief against the defendants.

On July 15, 2011, a complaint was filed against
Logitech and two of its subsidiaries in the United States District Court for the Central District of California by Universal Electronics, Inc. (UEI). The complaint alleges that Logitechs Harmony remotes, Logitech Revue for Google TV and other
products for the digital home infringe one or more of the seventeen UEI patents asserted in the action, and seeks unspecified monetary damages and other relief against the defendants.

In addition, the Company is involved in a number of lawsuits and claims relating to commercial matters that arise in the
normal course of business.

The Company believes these lawsuits and claims are without merit and intends to
vigorously defend against them. However, there can be no assurances that its defenses will be successful, or that any judgment or settlement in any of these lawsuits would not have a material adverse impact on the Companys business, financial
condition, cash flows and results of operations. The Companys accruals for lawsuits and claims as of June 30, 2011 were not material.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

Market risk represents the potential for loss
due to adverse changes in the fair value of financial instruments. As a global concern, the Company faces exposure to adverse movements in foreign currency



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exchange rates and interest rates. These exposures may change over time as business practices evolve and could have a material adverse impact on the Companys financial results.

Foreign Currency Exchange Rates

The Company is exposed to foreign currency exchange rate risk as it transacts business in multiple foreign currencies, including exposure related to anticipated sales, anticipated purchases and assets and
liabilities denominated in currencies other than the U.S. dollar. Logitech transacts business in over 30 currencies worldwide, of which the most significant to operations are the CNY (Chinese renminbi), Taiwanese dollar, euro, British pound, Mexican
peso, Japanese yen, and Canadian dollar. The functional currency of the Companys operations is primarily the U.S. dollar. To a lesser extent, certain operations use the euro, CNY, Swiss franc or the local currency of the country as their
functional currencies. Accordingly, unrealized foreign currency gains or losses resulting from the translation of net assets or liabilities denominated in foreign currencies to the U.S. dollar are accumulated in the cumulative translation adjustment
component of other comprehensive income in shareholders equity.

The table below provides information
about the Companys underlying transactions that are sensitive to foreign exchange rate changes, primarily assets and liabilities denominated in currencies other than the functional currency, where the net exposure is greater than $0.5 million
at June 30, 2011. The table also presents the U.S. dollar impact on earnings of a 10% appreciation and a 10% depreciation of the functional currency as compared with the transaction currency (in thousands):



|                    |  |                      |  |                                         |        |   |                                                         |   |        |                                                         |  |   |       | 
|------------------- |  | -------------------- |  | --------------------------------------- | ------ | - | ------------------------------------------------------- | - | ------ | ------------------------------------------------------- |  | - | ----- | 
|Functional
Currency |  | Transaction Currency |  | Net ExposedLong (Short)CurrencyPosition |        |   | FX Gain (Loss)From 10%Appreciation ofFunctionalCurrency |   |        | FX Gain (Loss)From 10%Depreciation ofFunctionalCurrency | 
|                    |  |                      |  |                                        
|U.S. dollar         |  | Chinese renminbi     |  | $                                       | 56,730 |   |                                                         | $ | (5,157 | )                                                       |  | $ | 6,303 | 
|Taiwanese dollar    |  | U.S. dollar          |  |                                         | 22,677 |   |                                                         |   | (2,062 | )                                                       |  |   | 2,520 | 
|Euro                |  | British pound        |  |                                         | 8,407  |   |                                                         |   | (764   | )                                                       |  |   | 934   | 
|Mexican peso        |  | U.S. dollar          |  |                                         | (7,755 | ) |                                                         |   | 705    |                                                         |  |   | (862) | 
|Japanese yen        |  | U.S. dollar          |  |                                         | (7,493 | ) |                                                         |   | 681    |                                                         |  |   | (833) | 
|U.S. dollar         |  | Canadian dollar      |  |                                         | 4,989  |   |                                                         |   | (454   | )                                                       |  |   | 554   | 
|Euro                |  | Russian rouble       |  |                                         | 1,383  |   |                                                         |   | (126   | )                                                       |  |   | 154   | 
|Australian dollar   |  | U.S. dollar          |  |                                         | 1,043  |   |                                                         |   | (95    | )                                                       |  |   | 116   | 
|Euro                |  | Swedish krona        |  |                                         | (871   | ) |                                                         |   | 79     |                                                         |  |   | (97)  | 
|Swiss franc         |  | U.S. dollar          |  |                                         | 826    |   |                                                         |   | (75    | )                                                       |  |   | 92    | 
|Euro                |  | Swiss franc          |  |                                         | (808   | ) |                                                         |   | 73     |                                                         |  |   | (90)  | 
|U.S. dollar         |  | Hong Kong dollar     |  |                                         | (561   | ) |                                                         |   | 51     |                                                         |  |   | (62)  | 
|                    |  |                      |  |                                         |        |  
|                    |  |                      |  |                                        
|                    |  |                      |  | $                                       | 78,567 |   |                                                         | $ | (7,144 | )                                                       |  | $ | 8,729 | 
|                    |  |                      |  |                                         |        |  

Long currency positions represent net assets being held in the transaction currency while
short currency positions represent net liabilities being held in the transaction currency.

The Companys
principal manufacturing operations are located in China, with much of its component and raw material costs transacted in CNY. However, the functional currency of its Chinese operating subsidiary is the U.S. dollar as its sales and trade receivables
are transacted in U.S. dollars. To hedge against any potential significant appreciation of the CNY, the Company maintains a portion of its cash investments in CNY-denominated accounts. At June 30, 2011, net assets held in CNY totaled $56.7
million. The Company continues to evaluate the level of net assets held in CNY relative to component and raw material purchases and interest rates on cash equivalents.



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The Company enters into foreign exchange forward contracts to hedge against
exposure to changes in foreign currency exchange rates related to its subsidiaries forecasted inventory purchases. The primary risk managed by using derivative instruments is the foreign currency exchange rate risk. The Company has designated
these derivatives as cash flow hedges. Logitech does not use derivative financial instruments for trading or speculative purposes. These hedging contracts generally mature within three months, and are denominated in the same currency as the
underlying transactions. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses
are reclassified to cost of goods sold. The Company assesses the effectiveness of the hedges by comparing changes in the spot rate of the currency underlying the forward contract with changes in the spot rate of the currency in which the forecasted
transaction will be consummated. If the underlying transaction being hedged fails to occur or if a portion of the hedge does not generate offsetting changes in the foreign currency exposure of forecasted inventory purchases, the Company immediately
recognizes the gain or loss on the associated financial instrument in other income (expense). As of June 30, 2011, the notional amounts of foreign exchange forward contracts outstanding related to forecasted inventory purchases were $66.3
million (45.8 million). Deferred realized losses of $1.3 million are recorded in accumulated other comprehensive loss at June 30, 2011, and are expected to be reclassified to cost of goods sold when the related inventory is sold. Deferred
unrealized losses of $1.0 million related to open cash flow hedges are also recorded in accumulated other comprehensive loss at June 30, 2011, and these forward contracts will be revalued in future periods until the related inventory is sold,
at which time the resulting gains or losses will be reclassified to cost of goods sold.

The Company also
enters into foreign exchange forward contracts to reduce the short-term effects of foreign currency fluctuations on certain foreign currency receivables or payables. These forward contracts generally mature within three months. The Company may also
enter into foreign exchange swap contracts to economically extend the terms of its foreign exchange forward contracts. The primary risk managed by using forward and swap contracts is the foreign currency exchange rate risk. The gains or losses on
foreign exchange forward contracts are recognized in earnings based on the changes in fair value.

The
notional amounts of foreign exchange forward contracts outstanding at June 30, 2011 relating to foreign currency receivables or payables were $8.9 million. Open forward contracts as of June 30, 2011 consisted of contracts in British pounds
to purchase euros at a future date at a predetermined exchange rate. The notional amounts of foreign exchange swap contracts outstanding at June 30, 2011 were $14.6 million. Swap contracts outstanding at June 30, 2011 consisted of
contracts in Mexican pesos and Japanese yen. Unrealized net gains on the contracts outstanding at June 30, 2011 were $0.2 million.

If the U.S. dollar had appreciated by 10% at June 30, 2011 compared with the foreign currencies in which we have forward or swap contracts, an unrealized gain of $7.1 million in our forward foreign
exchange contract portfolio would have occurred. If the U.S. dollar had depreciated by 10% compared with the foreign currencies in which we have forward or swap contracts, a $9.1 million unrealized loss in our forward foreign exchange contract
portfolio would have occurred.

Interest Rates

Changes in interest rates could impact the Companys anticipated interest income on its cash equivalents and
investment securities. The Company prepared sensitivity analyses of its interest rate exposures to assess the impact of hypothetical changes in interest rates. Based on the results of these analyses, a 100 basis point decrease or increase in
interest rates from the June 30, 2011 period end rates would not have a material effect on the Companys results of operations or cash flows.



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ITEM 4.   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Logitechs Acting Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of
the end of the period covered by this Form 10-Q, have concluded that, as of such date, our disclosure controls and procedures are effective.

Disclosure controls are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Form 10-Q, is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls are also designed to reasonably assure that this information is accumulated and communicated
to our management, including the Acting Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in the Companys internal control over financial reporting during the fiscal quarter
ended June 30, 2011, that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

On May 23, 2011, a class action complaint was filed against Logitech and certain of its officers. This action was
filed in the United States District Court for the Southern District of New York on behalf of individuals who purchased Logitech shares between October 28, 2010 and April 1, 2011. The action was transferred to the United States District
Court for the Northern District of California on July 28, 2011. The complaint relates to Logitechs disclosure on March 31, 2011 that its results for fiscal year 2011 would fall below expectations and seeks unspecified monetary
damages and other relief against the defendants.

On July 15, 2011, a complaint was filed against
Logitech and two of its subsidiaries in the United States District Court for the Central District of California by Universal Electronics, Inc. (UEI). The complaint alleges that Logitechs Harmony remotes, Logitech Revue for Google TV and other
products for the digital home infringe one or more of the seventeen UEI patents asserted in the action, and seeks unspecified monetary damages and other relief against the defendants.

In addition, the Company is involved in a number of lawsuits and claims relating to commercial matters that arise in the
normal course of business.

The Company believes these lawsuits and claims are without merit and intends to
vigorously defend against them. However, there can be no assurances that its defenses will be successful, or that any judgment or settlement in any of these lawsuits would not have a material adverse impact on the Companys business, financial
condition, cash flows and results of operations. The Companys accruals for lawsuits and claims as of June 30, 2011 were not material.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares.

Our revenues and profitability are difficult to predict due to the nature of the markets in which we compete, the
uncertainty of current and future global economic conditions, and for many other reasons, including the following:



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



| |  |  | A significant portion of our quarterly retail sales typically occurs in the last weeks of each quarter, further increasing the difficulty in
predicting quarterly revenues and profitability.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our sales are impacted by end-user consumer demand and current and future global economic conditions, and can therefore fluctuate abruptly and
significantly during periods of uncertain economic conditions or geographic distress, as well as from shifts in consumer buying patterns.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We must incur a large portion of our costs in advance of sales orders, because we must plan research and production, order components, buy tooling
equipment, and enter into development, sales and marketing, and other operating commitments prior to obtaining firm commitments from our customers. This makes it difficult for us to rapidly adjust our costs during the quarter in response to a
revenue shortfall, which could adversely affect our operating results.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Fluctuations in currency exchange rates can impact our revenues, expenses and profitability because we report our financial statements in U.S.
dollars, whereas a significant portion of our revenues and expenses are in other currencies. We attempt to adjust product prices over time to offset the impact of currency movements. However, over short periods of time and during periods of weakness
in consumer spending, our ability to increase local currency selling prices to offset the impact of currency fluctuations is limited.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because our operating results are difficult to predict, our results may be below the expectations of financial analysts and investors, which could cause the price of our shares to decline.

We believe sales of our PC peripherals in our mature markets will decline, and that our future growth will depend
on our emerging product categories and sales in emerging market geographies, and if we do not successfully execute on our growth opportunities, or if our sales in mature markets are less than we expect, we will not experience the sales and revenue
growth we experienced in the past.

We have historically targeted peripherals for the PC platform.
Consumer demand for PCs is decelerating in our traditional, mature markets such as North America, Western and Nordic Europe, Japan, Australia, and New Zealand, and we believe sales of our PC peripherals in mature markets will decline in fiscal year
2012 and potentially beyond. As a result, we intend to focus more of our personnel and financial resources on growth opportunities in emerging markets, in products for tablets and mobile devices, on our LifeSize division, and other potential growth
opportunities. Our investments may not result in the growth we expect, or when we expect it, for a variety of reasons including those described below.

Emerging Markets. We believe that the worlds emerging markets, such as China, India, Russia and Brazil, will be the high growth markets of the future for PCs and for our peripherals product
lines. We are currently allocating significant resources to our sales, marketing and administrative personnel in China and, to a lesser extent, other emerging markets. We anticipate that emerging markets will include potentially high growth
opportunities, offset by potential entrenched local competition, higher credit risks, and cultural differences that affect consumer trends in ways which may be substantially different from our current major markets. If we do not develop innovative
and reliable peripherals and enhancements in a cost-effective and timely manner which are attractive to consumers in these markets, if consumer demand for PCs and our peripherals in emerging markets does not increase as much as we expect, or if we
invest resources in products or geographic areas which do not produce the growth or profitability we expect, or when we expect it, our business and results of operations could be significantly harmed.

Tablets, Smartphones and Other Mobile Devices.The increasing popularity of smaller, mobile computing devices such
as tablets and smartphones with touch interfaces is rapidly changing the consumer PC market. In our retail channels, tablets and smartphones are sold by retailers without peripherals. We believe this creates opportunities to sell products to
consumers to help make their devices more productive and comfortable. However, we only recently introduced our product line for tablets, and consumer acceptance and demand for peripherals for use with tablets and other mobile computing devices is
still uncertain. The increasing popularity of tablets and smart phones might decrease consumer demand for our PC peripherals, which would negatively affect our sales of these products. If we do not successfully innovate and market products designed
for tablets and smart phones, if our distributor customers do not choose to carry or market such peripherals, or if general consumer demand for peripherals for use with these devices does not increase, our business and results of operations could be
significantly harmed.

LifeSize. Competition in the video conferencing industry is intense, with large,
well-financed competitors, and we expect the number of competitors and the intensity of competition to increase. Although we have maintained the LifeSize enterprise sales organization, Logitech has little experience with selling to enterprise
accounts, or in marketing to large enterprises. Additionally, as customers complete video conferencing installations, they may require greater levels of service and support than we have provided in the past. Demand for these types of services and
support may increase in the future. There can be no assurance that we can provide products, services and support to effectively compete for these market



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opportunities. Further, provision of greater levels of services and support by us may result in a delay in the timing of revenue recognition. We anticipate that the growth of our LifeSize
division will continue to require significant continuing investments in product development and sales and marketing to stimulate and support future growth. If our future investments do not produce the growth that we anticipate, or when we anticipate
it, our business and results of operations could be significantly harmed.

Google TV and Connected TVs.
We have invested and expect to continue to invest in the development and marketing of our products for the Google TV platform. While we believe the Google TV platform has the potential to provide us with incremental sales over an extended period of
time, consumer reaction to and demand for Google TV and our products for it have been less positive than we anticipated. In early July 2011, we decided to lower the retail price of Logitech Revue from $249 to $99 in the second quarter of fiscal year
2012, as the Google TV platform has not met widespread U.S. consumer acceptance and sales of Logitech Revue have been significantly below our expectations. As a result, we recorded a $34.1 million valuation adjustment during the quarter to cost of
goods sold, reflecting the lower of cost or market on our inventory of Logitech Revue and related peripherals on hand and at our suppliers. If the price drop does not have the intended positive impact on sales and consumer adoption of the Google TV
platform, demand continues to be less positive than we expect, if Google fails to further develop software enhancements for and support of the Google TV platform, if Google TV is not introduced by Google in countries outside of the United States, or
if we choose to invest more in marketing, inventory, supplier commitments or other expenses in order to develop and promote our products for Google TV, our revenue expectations for our products for Google TV may not be achieved, the revenue
generated could be less than the resources we have invested, and the value of our inventory could decline further, which could harm our business and operating results.

In addition, our sales in our mature markets in North America, Western and Nordic Europe, Japan, Australia, and New
Zealand might be less than we expect, due to a decline in business or economic conditions in one or more of the countries or regions, a greater decline than we expect in demand for our products, our inability to successfully execute our sales and
marketing plans, or for other reasons. In the fourth quarter of fiscal year 2011, we experienced weak consumer demand for our products across much of Western Europe which, combined with our lack of successful execution of EMEA-specific pricing and
channel management programs, negatively impacted our financial performance in EMEA in that quarter. We also experienced weak consumer demand in much of Western Europe in the first quarter of fiscal year 2012, which negatively impacted our financial
performance in that quarter. If consumer demand for our products in EMEA or our other sales regions worsens, or our operational changes in EMEA do not result in the EMEA sales improvement that we expect, or when we expect it, our sales and operating
results will be negatively impacted.

In our OEM channel, the slower growth of desktop PCs has adversely
affected our sales of OEM mice, which have historically made up the bulk of our OEM sales. Our OEM sales accounted for 10% and 9% of total revenues in the three months ended June 30, 2011 and the fiscal year ended March 31, 2011. If the
desktop PC market continues to experience slower growth or decline, and if we do not successfully diversify our OEM business, our OEM revenues could be adversely affected.

If we do not compete effectively, demand for our products could decline and our business and operating results
could be adversely affected.

The peripherals and video conferencing industries are intensely
competitive.

The peripherals industry is characterized by short product life cycles, continual performance
enhancements, and rapid adoption of technological and product advancements by competitors in our retail markets, and price sensitivity in the OEM market. We experience aggressive price competition and other promotional activities from our primary
competitors and from less-established brands, including brands owned by retail customers known as house brands, in response to declining consumer demand in both the retail and OEM markets. In addition, our competitors may offer customers terms and
conditions which may



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be more favorable than our terms and conditions and may require us to take actions to increase our customer incentive programs, which could impact our revenues and operating margins.

The video conferencing industry is characterized by continual performance enhancements and large, well-financed
competitors. There is heightened interest in the video conferencing market by companies such as Cisco Systems, Inc. and Hewlett-Packard Company, and as a result, we expect competition in the industry to further intensify. In addition, there are an
increasing number of PC-based multi-person video conferencing applications, such as those offered by Skype, which could compete at the lower end of the video conferencing market with our LifeSize products and services.

In recent years, we have expanded the categories of products we sell, and entered new markets. We remain alert to
opportunities in new categories and markets. As we do so, we are confronting new competitors, many of which have more experience in the categories or markets and have greater marketing resources and brand name recognition than we have. In addition,
because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater competition in the future from well-established consumer electronics companies in our developing categories, such as our products
for Google TV, as well as in future categories we might enter. Many of these companies, such as Microsoft Corporation, Cisco, Sony Corporation, Hewlett-Packard, Polycom, Inc. and others, have greater financial, technical, sales, marketing and other
resources than we have.

Microsoft is a leading producer of operating systems and applications with which our
mice, keyboards and webcams are designed to operate. In addition, Microsoft has significantly greater financial, technical, sales, marketing and other resources than Logitech, as well as greater name recognition and a larger customer base. As a
result, Microsoft may be able to improve the functionality of its own peripherals to correspond with ongoing enhancements to its operating systems and software applications before we are able to make such improvements. This ability could provide
Microsoft with significant lead-time advantages. In addition, Microsoft may be able to offer pricing advantages on bundled hardware and software products that we may not be able to offer, and may be financially positioned to exert significant
downward pressure on product prices and upward pressure on promotional incentives in order to gain market share.

Pointing Devices, Keyboards and Desktops.Microsoft is our main competitor in the mice, keyboard and desktop product lines. We also experience competition and pricing pressure for corded and
cordless mice and desktops from less-established brands, including house brands, which has impacted our market share in some sales geographies and which could potentially further impact our market share.

Audio.Competitors in audio devices vary by product line. In the PC, mobile entertainment and communication
platform speaker business, competitors include Plantronics, Inc., Altec Lansing LLC, Creative Labs, Inc. and Bose Corporation. In the PC headset and microphone business, our main competitors include Plantronics and Altec Lansing. Our Squeezebox
network-based audio systems for digital music compete with systems from several small competitors as well as larger established consumer electronics companies, like Sony and Royal Philips Electronics NV.

Video. Our competitors for PC Web cameras include Microsoft, Creative Labs, Philips, and Hewlett-Packard. We are
encountering aggressive pricing practices and promotions on a worldwide basis, which have negatively impacted our revenues and margins. The worldwide market for PC webcams has been very competitive, and as a result, pricing practices and promotions
by our competitors have become more aggressive.

Gaming.Competitors for our interactive entertainment
products include Intec, Razer USA Ltd., Performance Designed Products, LLC (Pelican Accessories), Mad Catz Interactive, Inc., and its Saitek brand. Our controllers for PlayStation also compete against controllers offered by Sony.

Digital Home. Our competitors for remotes include, among others, Philips, Universal Remote Control, Inc.,
Universal Electronics Inc., RCA and Sony. Our products for Google TV compete to some extent with those offered by Sony, Apple Inc. and Roku, Inc., and more broadly, with connectivity devices



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and peripherals for other connected or smart TV platforms. We expect that the growth in recent years in consumer demand for peripheral devices for home entertainment systems will likely result in
increased competition.

Video Conferencing.Our primary competitors in the enterprise video
conferencing market are Ciscos Tandberg subsidiary, Polycom, Inc., Radvision Ltd., Sony and Vidyo, Inc. Some of these companies have longer experience and a larger customer installed base than LifeSize. Cisco and Hewlett-Packard also compete
with us for sales of higher-end systems, and have substantially greater financial, sales and marketing, and engineering resources than we do. In addition, Microsofts recent offer to acquire Skype Limited, if consummated, has the potential to
give Microsoft a large user base for future competitive video chat and video-conferencing products, along with integration potential across Microsofts product portfolio. There are also a number of smaller competitors which compete with
LifeSize, along with Polycom, Cisco and Hewlett-Packard, for new accounts, OEM relationships, and installations.

The growth of our LifeSize division depends in part on our ability to increase sales to enterprises with installed bases of Cisco and Tandberg equipment, and to enterprises that may purchase their
equipment in the future. Cisco is a leading producer of networking, switching and other telecommunications infrastructure products and end-points, such as phones, that are frequently used within enterprises. We believe the ability of our LifeSize
products to interoperate with Cisco and Tandberg equipment, and with the equipment of other telecommunications, video conferencing or telepresence equipment suppliers, to be a key factor in purchasing decisions by current or prospective LifeSize
customers. Cisco and Tandberg may be able to improve the functionality of their own video conferencing equipment to correspond with ongoing enhancements to Ciscos networking, switching and other telecommunications equipment before we are able
to make such improvements, or may restrict the interoperability of their products with ours. This could significantly harm the sales of our LifeSize division. If LifeSize sales declined substantially, the goodwill associated with the acquisition of
the division might be determined to be impaired, resulting in a write-down. As a result of such sales decline or goodwill impairment, the growth of our LifeSize division, and the growth of Logitech as a whole, could be significantly harmed.

If we do not compete effectively, demand for our products could decline, our gross margin could decrease, we
could lose market share and our revenues could decline.

If we do not accurately forecast market demand
for our products, our business and operating results could be adversely affected.

We use our
forecasts of product demand to make decisions regarding investments of our resources and production levels of our products. Although we receive forecasts from our customers, many are not obligated to purchase the forecasted demand. Also, actual
sales volumes for individual products in our retail distribution channel can be volatile due to changes in consumer preferences and other reasons. In addition, our retail products have short product life cycles, so a failure to accurately predict
high demand for a product can result in lost sales that we may not recover in subsequent periods, or higher product costs if we meet demand by paying higher costs for materials, production and delivery. We could also frustrate our customers and lose
shelf space. Our failure to predict low demand for a product can result in excess inventory, lower cash flows and lower margins if we are required to reduce product prices in order to reduce inventories.

Over the past few years, we have expanded the number and types of products we sell, and the geographic markets in which
we sell them, and we will endeavor to further expand our product portfolio and sales reach. The growth of our product portfolio and our sales markets has increased the difficulty of accurately forecasting product demand.

We have experienced large differences between our forecasts and actual demand for our products. For example, our
expectations for our EMEA region in the fourth quarter of fiscal year 2011 were substantially higher than the actual demand we experienced. We expect other differences between forecasts



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and actual demand to arise in the future. If we do not accurately predict product demand, our business and operating results could be adversely affected.

Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated
fluctuations in our operating results.

Our gross margins can vary due to consumer demand,
competition, product life cycle, new product introductions, unit volumes, commodity and supply chain costs, geographic sales mix, foreign currency exchange rates, and the complexity and functionality of new product innovations. In particular, if we
are not able to introduce new products in a timely manner at the product cost we expect, or if consumer demand for our products is less than we anticipate, or if there are product pricing, marketing and other initiatives by our competitors to which
we need to react that lower our margins, then our overall gross margin will be less than we project. For example, in the three months ended June 30, 2011, we decided to lower the retail price of Logitech Revue from $249 to $99 in the second
quarter of fiscal year 2012, as the Google TV platform has not met widespread U.S. consumer acceptance and sales of Logitech Revue have been significantly below our expectations. As a result, we recorded a $34.1 million valuation adjustment during
the quarter to cost of goods sold, reflecting the lower of cost or market on our inventory of Logitech Revue and related peripherals on hand and at our suppliers.

In addition, our gross margins may vary significantly by product line, sales geography and customer type, as well as
within product lines. When the mix of products sold shifts from higher margin product lines to lower margin product lines, to lower margin sales geographies, or to lower margin products within product lines, our overall gross margins and our
profitability may be adversely affected.

The impact of these factors on gross margins can create
unanticipated fluctuations in our operating results, which may cause volatility in the price of our shares.

Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn,
denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.

Our peripherals business has historically been built largely around the PC platform, which over time became relatively
open, and its inputs and operating systems standardized. With the growth of mobile, tablet, gaming and other computer devices, the number of platforms has grown, and with it the complexity and increased need for us to have business and contractual
relationships with the platform owners in order to produce products compatible with these platforms. Our product portfolio includes current and future products designed for use with third-party platforms or software, such as the Apple iPad, iPod and
iPhone, Google TV, Android phones, Sony PlayStation, and Nintendo Wii. Our business in these categories relies on our access to the platforms of third parties, which can be withdrawn, denied or not be available on terms acceptable to us.

Our access to third-party platforms may require paying a royalty, which lowers our product margins, or may otherwise be
on terms that are not acceptable to us. In addition, the third-party platforms or technologies used to interact with our product portfolio can be delayed in production or can change without prior notice to us, which can result in our having excess
inventory or lower margins.

If we are unable to access third-party platforms or technologies, or if our
access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or change without notice to us, our business and operating results could be adversely affected.

Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast
Asia, which exposes us to risks associated with doing business in that geographic area.

Our principal
manufacturing operations are located in China, and we utilize third-party contract manufacturers in China, Malaysia, Thailand and India.



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Our manufacturing operations in China could be severely impacted by changes
in the interpretation and enforcement of legal standards, by strains on Chinas available labor pool, communications, trade, and other infrastructures, by natural disasters, by conflicts or disagreements between China and Taiwan or China and
the United States, by labor unrest, and by other trade customs and practices that are dissimilar to those in the United States and Europe. Interpretation and enforcement of Chinas laws and regulations continue to evolve and we expect
differences in interpretation and enforcement to continue in the foreseeable future.

Our manufacturing
operations at third-party contractors could be severely impacted by contractual disagreements, by labor unrest, by natural disasters, by strains on local communications, trade, and other infrastructures, by competition for the available labor pool
or manufacturing capacity, and by other trade customs and practices that are dissimilar to those in the United States and Europe.

Further, we may be exposed to fluctuations in the value of the local currency in the countries in which manufacturing occurs. Future appreciation of these local currencies could increase our component and
other raw material costs. In addition, our labor costs could continue to rise as wage rates increase and the available labor pool declines. These conditions could adversely affect our gross margins and financial results.

We purchase key components and products from a limited number of sources, and our business and operating results
could be harmed if supply were delayed or constrained or if there were shortages of required components.

We purchase certain products and key components from a limited number of sources. If the supply of these products or key components, such as micro-controllers, optical sensors and LifeSize hardware
products, were to be delayed or constrained, or if one or more of our single-source suppliers goes out of business as a result of adverse global economic conditions or natural disasters, we might be unable to find a new supplier on acceptable terms,
or at all, and our product shipments to our customers could be delayed, which could harm our business, financial condition and operating results.

Lead times for materials, components and products ordered by us or by our contract manufacturers can vary significantly and depend on factors such as contract terms, demand for a component, and supplier
capacity. From time to time, we have experienced component shortages and extended lead times on semiconductors, such as micro-controllers and optical sensors, and base metals used in our products. Shortages or interruptions in the supply of
components or subcontracted products, or our inability to procure these components or products from alternate sources at acceptable prices in a timely manner, could delay shipment of our products or increase our production costs, which could
adversely affect our business and operating results.

If we do not successfully coordinate the worldwide
manufacturing and distribution of our products, we could lose sales.

Our business requires us to
coordinate the manufacture and distribution of our products over much of the world. We rely on third parties to manufacture many of our products, manage centralized distribution centers, and transport our products. If we do not successfully
coordinate the timely manufacturing and distribution of our products, we may have insufficient supply of products to meet customer demand and we could lose sales, or we may experience a build-up in inventory.

A significant portion of our quarterly retail orders and product deliveries generally occur in the last weeks of the
fiscal quarter. This places pressure on our supply chain and could adversely impact our revenues and profitability if we are unable to successfully fulfill customer orders in the quarter.

We conduct operations in a number of countries, and are investing significantly in growing our sales and marketing
activities in China, and the effect of business, legal and political risks associated with international operations could significantly harm us.



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We conduct operations in a number of countries, and are investing
significantly in growing our sales and marketing activities in China. We may also increase our investments to grow sales in other emerging markets. There are risks inherent in doing business in international markets, including:



| |  |  | difficulties in staffing and managing international operations;
| | - |  | ---------------------------------------------------------------



| |  |  | compliance with laws and regulations, including environmental and tax laws, which vary from country to country and over time, increasing the costs
of compliance and potential risks of non-compliance;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | exposure to political and financial instability, leading to currency exchange losses and collection difficulties or other losses;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | exposure to fluctuations in the value of local currencies;
| | - |  | ----------------------------------------------------------



| |  |  | difficulties and increased costs in establishing sales and distribution channels in unfamiliar markets, with their own market characteristics and
competition;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in VAT (value-added tax) or VAT reimbursement;
| | - |  | ------------------------------------------------------



| |  |  | imposition of currency exchange controls; and
| | - |  | ---------------------------------------------



| |  |  | delays from customs brokers or government agencies.
| | - |  | ---------------------------------------------------

Any of these risks could significantly harm our business, financial condition and operating results.

We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the
development of products that compete with our products.

Our future success depends in part on our
proprietary technology, technical know-how and other intellectual property. We rely on a combination of patent, trade secret, copyright, trademark and other intellectual property laws, and confidentiality procedures and contractual provisions such
as nondisclosure terms and licenses, to protect our intellectual property.

We hold various United States
patents and pending applications, together with corresponding patents and pending applications from other countries. It is possible that any patent owned by us will be invalidated, deemed unenforceable, circumvented or challenged, that the patent
rights granted will not provide competitive advantages to us, or that any of our pending or future patent applications will not be granted. In addition, other intellectual property laws or our confidentiality procedures and contractual provisions
may not adequately protect our intellectual property. Also, others may independently develop similar technology, duplicate our products, or design around our patents or other intellectual property rights. Unauthorized parties have copied and may in
the future attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Any of these events could significantly harm our business, financial condition and operating results.

Claims by others that we infringe their proprietary technology could harm our business.

We have been expanding the categories of products we sell, and entering new markets, such as the market for enterprise
video conferencing and our introduction of products for Google TV, tablets and mobile devices. We expect to continue to enter new categories and markets. As we do so, we face an increased risk that claims alleging we infringe the patent or other
intellectual property rights of others, regardless of the merit of the claims, may increase in number and significance. Infringement claims against us may also increase as the functionality of video, voice, data and conferencing products begin to
overlap. This risk is heightened by the increase in lawsuits brought by holders of patents that do not have an operating business. Intellectual property lawsuits are subject to inherent uncertainties due to the complexity



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of the technical issues involved, and we cannot be certain that we will be successful in defending ourselves against intellectual property claims. A successful claimant could secure a judgment
that requires us to pay substantial damages or prevents us from distributing certain products or performing certain services. We might also be required to seek a license for the use of such intellectual property, which may not be available on
commercially acceptable terms or at all. Alternatively, we may be required to develop non-infringing technology, which could require significant effort and expense and may ultimately not be successful. Any claims or proceedings against us, whether
meritorious or not, could be time consuming, result in costly litigation or the diversion of significant operational resources, or require us to enter into royalty or licensing agreements, any of which could materially and adversely affect our
business and results of operations.

Product quality issues could adversely affect our reputation and
could impact our operating results.

The market for our products is characterized by rapidly changing
technology and evolving industry standards. To remain competitive, we must continually introduce new products and technologies. The products that we sell could contain defects in design or manufacture. Defects could also occur in the products or
components that are supplied to us. There can be no assurance we will be able to detect and remedy all defects in the hardware and software we sell. Failure to do so could result in product recalls, product redesign efforts, lost revenue, loss of
reputation, and significant warranty and other expenses to remedy.

Our effective income tax rates may
increase in the future, which could adversely affect our net income (loss).

We operate in multiple
jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. Our effective income tax rate may be affected by changes in or interpretations of tax laws in any given jurisdiction, utilization of net operating loss and tax
credit carryforwards, changes in geographical allocation of income and expense, and changes in managements assessment of matters such as the realizability of deferred tax assets. In the past, we have experienced fluctuations in our effective
income tax rate. Our effective income tax rate in a given fiscal year reflects a variety of factors that may not be present in the succeeding fiscal year or years. There is no assurance that our effective income tax rate will not change in future
periods. We are currently subject to ongoing audits in various jurisdictions and a material assessment by a governing tax authority could adversely affect our profitability. If our effective income tax rate increases in future periods, our net
income (loss) could be adversely affected.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS

Share Repurchases

Logitech did not make any purchases of its equity securities during the quarter ended June 30, 2011. In September 2008, our Board of Directors approved a share buyback program, which authorizes the
Company to invest up to $250 million to purchase its own shares. No shares have been repurchased under this program.



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ITEM 6.   EXHIBITS

Exhibit Index



|            |  |                                                                                     
|----------- |  | ------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                         
|            | 
|31.1        |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.                  
|            | 
|31.2        |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.                  
|            | 
|32.1        |  | Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.*
|            | 
|101.INS     |  | XBRL Instance Document **                                                           
|            | 
|101.SCH     |  | XBRL Taxonomy Extension Schema Document **                                          
|            | 
|101.CAL     |  | XBRL Taxonomy Extension Calculation Linkbase Document **                            
|            | 
|101.LAB     |  | XBRL Taxonomy Extension Label Linkbase Document **                                  
|            | 
|101.PRE     |  | XBRL Taxonomy Extension Presentation Linkbase Document **                           
|            | 
|101.DEF     |  | XBRL Taxonomy Definition Linkbase Document **                                       



|* | This exhibit is furnished herewith, but not deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to liability under that section. Such certifications will not be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate
them by reference.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|** | This exhibit will be furnished in an amendment to this Quarterly Report on Form 10-Q as permitted by Rule 405 of Regulation S-T.
|-- | --------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.



LOGITECH INTERNATIONAL S.A./s/ Guerrino De LucaGuerrino De Luca Chairman, Acting President and Chief Executive Officer/s/ Erik K. BardmanErik K. Bardman Senior Vice President, Finance and Chief Financial Officer


August 8, 2011



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