Sanmina Annual Report 2013

Plain-text annual report

Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-K(Mark One)[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended September 28, 2013or[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to .Commission File Number 0-21272Sanmina Corporation(Exact name of registrant as specified in its charter)Delaware 77-0228183(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 2700 N. First St., San Jose, CA 95134(Address of principal executive offices) (Zip Code)Registrant's telephone number, including area code: (408) 964-3500Securities registered pursuant to Section 12(b) of the Act:Common Stock, $0.01 Par ValueSecurities registered pursuant to Section 12(g) of the Act:None(Title of Class)Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ x ] No [ ]Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act. Yes [ ] No [ x ] Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 Website, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant wasrequired to submit and post such files). Yes [ x ] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405 of this chapter) is not contained herein, and will not becontained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment tothis Form 10-K. [ ] 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 definitions of“large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer [ x ] Accelerated filer [ ]Non-accelerated filer [ ] Smaller reporting company [ ](Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ x ] The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant was approximately $923,200,862 as of March 29,2013, based upon the last reported sale price of the common stock on the NASDAQ Global Select Market on March 28, 2013.As of November 12, 2013, the number of shares outstanding of the registrant's common stock was 84,221,764. DOCUMENTS INCORPORATED BY REFERENCE Certain information is incorporated into Part III of this report by reference to the Proxy Statement for the registrant's annual meeting of stockholders to be held onMarch 10, 2014 to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by thisForm 10-K.Table of ContentsSANMINA CORPORATION INDEX PART IItem 1.Business3Item 1A.Risk Factors17Item 1B.Unresolved Staff Comments30Item 2.Properties31Item 3.Legal Proceedings32Item 4.Mine Safety Disclosures33PART IIItem 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities34Item 6.Selected Financial Data36Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations37Item 7A.Quantitative and Qualitative Disclosures About Market Risk51Item 8.Financial Statements and Supplementary Data51Item 9.Changes In and Disagreements With Accountants on Accounting and Financial Disclosure86Item 9A.Controls and Procedures86Item 9B.Other Information86PART IIIItem 10.Directors and Executive Officers of the Registrant87Item 11.Executive Compensation87Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters87Item 13.Certain Relationships and Related Transactions87Item 14.Principal Accountant Fees and Services87PART IVItem 15.Exhibits and Financial Statement Schedules88Signatures942Table of Contents Item 1. Business Overview Sanmina Corporation (“we” or “Sanmina”) is a leading global provider of integrated manufacturing solutions, components, products and repair,logistics and after-market services. We provide these comprehensive offerings primarily to original equipment manufacturers, or OEMs, in the followingindustries; communications networks, computing and storage, multimedia, industrial and semiconductor capital equipment, defense and aerospace, medical,clean technology (CleanTech) and automotive. The combination of our advanced technologies, extensive manufacturing expertise and economies of scaleenables us to meet the specialized needs of our customers in a cost-effective manner. We were originally incorporated in Delaware in May 1989. Our end-to-end solutions, combined with our global expertise in supply chain management, enable us to manage our customers' products throughouttheir life cycles. These services include: •product design and engineering, including initial development, detailed design, prototyping, validation, preproduction services and manufacturingdesign release; •manufacturing of components, subassemblies and complete systems; •final system assembly and test; •direct order fulfillment and logistics services;•after-market product service and support; and•global supply chain management.We participate in the Electronics Manufacturing Services (EMS) industry and manage our operations as two businesses:1)Integrated Manufacturing Solutions (IMS). IMS is a reportable segment consisting of printed circuit board assembly and test, final systemassembly and test, and direct-order-fulfillment. This segment generated 80% of our total revenue in 2013.2)Components, Products and Services (CPS). Components include interconnect systems (printed circuit board fabrication, backplane and cableassemblies) and mechanical systems (enclosures, precision machining and plastic injection molding); Products include memory and solid statedrive products from Viking Technology, defense and aerospace products from SCI Technology, storage products from Newisys and optical andRF (Radio Frequency) modules; and Services include design, engineering, logistics and repair services. CPS generated 20% of our total revenuein 2013.We have facilities in 25 countries on six continents. We locate our facilities near our customers and our customers' end markets in major centers forthe electronics industry or in lower cost locations. Many of our operations located near our customers and their end markets are focused primarily on newproduct introduction, lower-volume, higher-complexity component and subsystem manufacturing and assembly, and final system assembly and test, whileour plants located in lower cost areas engage primarily in higher-volume, less-complex component and subsystem manufacturing and assembly. We have become one of the largest global manufacturing solutions providers by capitalizing on our competitive strengths including our: •end-to-end services; •product design and engineering resources; •vertically integrated manufacturing solutions; •advanced technologies;•global manufacturing capabilities, supported by robust IT systems and a global supplier base; •customer-focused organization; and •expertise in serving diverse end markets.3Table of ContentsIndustry Overview EMS companies are the principal beneficiaries of the increased use of outsourced manufacturing services by the electronics and other industries.Outsourced manufacturing refers to an OEM's use of EMS companies to manufacture their products, rather than using internal manufacturing capabilities.Historically, EMS companies generally manufactured only components or partial assemblies. As the EMS industry has evolved, OEMs have increased theirreliance on EMS companies for additional, more complex manufacturing services including design services. Today, EMS companies manufacture and testcomplete systems and manage the entire supply chains of their customers. Industry-leading EMS companies offer end-to-end services including product designand engineering, manufacturing, final system assembly and test, direct-order-fulfillment and logistics services, after-market product service and support, andglobal supply chain management. We believe OEMs will continue to increasingly outsource manufacturing because it allows OEMs to: •focus on core competencies; •access leading design and engineering capabilities; •improve supply chain management and purchasing power;•reduce operating costs and capital investment; •access global manufacturing services; and •accelerate time to market. Our Business Strategy Our objective is to maintain and enhance our leadership position in the technology industry. Key elements of our strategy include:Capitalizing on Our Comprehensive Solutions. We intend to capitalize on our end-to-end solutions which we believe will allow us to selladditional solutions to our existing customers and attract new customers. Our end-to-end solutions include product design and engineering, manufacturing,final system assembly and test, direct order fulfillment and logistics services, after-market product service and support and global supply chain management.Our vertically integrated manufacturing solutions enable us to manufacture additional system components and subassemblies for our customers. When weprovide a customer with a number of services, such as component manufacturing or higher value-added solutions, we are often able to improve our marginsand profitability. Consequently, our goal is to increase the number of manufacturing programs for which we provide multiple solutions. To achieve this goal,our sales and marketing organization seeks to cross-sell our solutions to customers. Extending Our Technology Capabilities. We rely on advanced processes and technologies to provide our products, components and verticallyintegrated manufacturing solutions. We continually improve our manufacturing processes and develop more advanced technologies, providing competitiveadvantage to our customers. We work with our customers to anticipate their future product and manufacturing requirements and align our technologyinvestment activities with their needs. We use our design expertise to develop product technology platforms that we can customize by incorporating othercomponents and subassemblies to meet the needs of particular OEMs. These technologies enhance our ability to manufacture complex, high-value addedproducts, allowing us to continue to win business from existing and new customers.Attract and Retain Long-Term Customer Partnerships. A core component of our strategy is to attract, build and retain long-term partnershipswith companies in growth industries that will benefit from our global footprint and unique value proposition in advanced electronics manufacturing. As aresult of this customer-centric approach, we have experienced business growth from both existing and new customers and will continue to cultivate thesepartnerships with additional products and value-added solutions.Joint Design Manufacturing (JDM) Solutions. As a result of customer feedback, and our customers' desire to manage research and developmentexpenses, we offer product design services to develop systems and components jointly with our customers. In a JDM model, our customers bring marketknowledge and product requirements and we bring complete design engineering and new product introduction (NPI) services. Our design engineering offeringsinclude product architecture, development, integration, regulatory and qualification services. Our NPI services include quick-turn prototyping, supply chainreadiness, functional test development and release-to-volume production. 4Table of ContentsContinuing to Penetrate Diverse End Markets. We focus our marketing and sales efforts on major end markets within the technology industry.We target markets we believe offer significant growth opportunities and for which OEMs sell complex products that are subject to rapid technological changebecause the manufacturing of these products requires higher value-added services. Our approach to our target markets is two-fold: strengthen our significantpresence in the communications, computing and multimedia markets, and also focus on under-penetrated target markets which have not extensively reliedupon outsource manufacturing companies in the past, including the medical, industrial and semiconductor capital equipment, CleanTech, automotive, anddefense and aerospace industries. We intend to continue our diversification across market segments and customers to reduce our dependence on any particularmarket or customer. Pursuing Strategic Transactions. We seek to undertake strategic transactions that give us the opportunity to access new customers' products,manufacturing solutions, repair service capabilities, technologies and geographic markets. In addition, we plan to continue to pursue OEM divestituretransactions that will augment existing strategic customer relationships with favorable supply agreement terms or build new relationships with customers inattractive end markets. Potential future transactions may include a variety of different business arrangements, including acquisitions, spin-offs, strategicpartnerships, restructurings and divestitures. We will continue to evaluate and pursue strategic opportunities on a highly selective basis. Continuing to Seek Cost Savings and Efficiency Improvements. We seek to optimize our facilities to provide cost-efficient services for ourcustomers. We maintain extensive operations in lower cost locations, including Latin America, Eastern Europe, China, Southeast Asia and India, and we planto expand our presence in these lower cost locations as appropriate to meet the needs of our customers. We believe we are well positioned to take advantage offuture opportunities on a global basis as a result of our existing footprint in 25 countries on six continents.Our Competitive StrengthsWe believe our competitive strengths differentiate us from our competitors and enable us to better serve the needs of OEMs. Our competitive strengthsinclude: End-to-End Solutions. We provide solutions throughout the world to support our customers' products during their entire life cycle, from productdesign and engineering, through manufacturing, to direct order fulfillment, logistics and after-market product service and support. Our end-to-end solutionsare among the most comprehensive in the industry because we focus on adding value before and after the actual manufacturing of our customers' products.Our end-to-end solutions enable us to provide our customers with a single source of supply for their manufacturing needs, reduce the time required to bringproducts to market, lower product costs and allow our customers to focus on those activities in which they expect to add the highest value. We believe that ourend-to-end solutions allow us to develop closer relationships with our customers and more effectively compete for their future business. Product Design and Engineering Resources. We provide product design and engineering services for new product designs, cost reductions anddesign-for-manufacturability (DFx) reviews. Our engineers work with our customers during the complete product life cycle. Our design and NPI centersprovide turnkey system design services including: electrical, mechanical, thermal, software, layout, simulation, test development, design verification,validation, regulatory compliance and testing services. We design high-speed digital, analog, radio frequency, mixed-signal, wired, wireless, optical andelectro-mechanical products. Our engineering engagement models include Joint Design Manufacturing (JDM), Contract Design Manufacturing (CDM) and consulting engineeringfor DFx, Value Engineering (cost reduction re-design), and design for environmental compliance with the European Union's Restrictions of HazardousSubstances (RoHS) and Waste Electrical and Electronic Equipment (WEEE). We focus on industry segments that include communications networks,computing and storage, medical, multimedia, defense and aerospace, industrial and semiconductor capital equipment, CleanTech and automotive. Systemsolutions for these industry segments are supported by our vertically integrated component technologies, namely, printed circuit boards, backplanes,enclosures, cable assemblies, precision machining, plastics and die castings, memory modules, and optical, RF and microelectronics modules. In these engagement models, our customers bring market knowledge and product requirements. We provide complete design engineering and newproduct introductions (NPI) services. For JDM products, typically the intellectual property is jointly owned by us and the customer and we realizemanufacturing revenue associated with building and shipping the product. For CDM projects, customers pay for all services and own the intellectual property. Vertically Integrated Manufacturing Solutions. We provide a range of vertically integrated manufacturing solutions including high-technologycomponents, new product introduction and test development services. These services are provided in5Table of Contentsevery major region worldwide, with design and prototyping close to our customer’s product development centers. Our customers significantly benefit from ourexperience in these areas including product cost reduction, minimization of assets deployed for manufacturing, time-to-market and a simplified supply chain.Key system components we manufacture include high-technology printed circuit boards and printed circuit board assemblies, backplanes and backplaneassemblies, enclosures, cable assemblies, precision machined components, optical and RF modules and memory modules. All of these components and sub-assemblies are integrated into a final product or system (HLA - High Level Assembly), configured and tested to our customer’s or the end-customer’sspecifications and delivered to the final point of use, with us managing the entire supply chain. By manufacturing system components and subassembliesourselves, we enhance continuity of supply and reduce costs for our customers. In addition, we are able to have greater control over the supply chain of ourcustomers' products and retain incremental profit opportunities.Customers also benefit from our combined design, technology and manufacturing experience with specific products and markets. For example, incommunications networks, our 20 years of experience in developing high-speed printed circuit boards ("PCBs") and backplanes attracts major customers tous because of the higher levels of product performance achieved using our technology. Examples of products where our experience and vertically integratedmodel provide competitive advantage include wireless base stations, network switches, routers and gateways, optical switches, enterprise-class servers andstorage appliances, set-top boxes, avionics and satellite systems, magnetic resonance imaging (MRI) and computer tomography (CT) scanners, and equipmentused in semiconductor manufacturing processes, including equipment for photolithography, chemical mechanical polishing, vapor deposition and robotics forwafer transfer. For these and many other products, customers can gain competitive advantage with our technology, while reducing the capital requirementsassociated with manufacturing and global supply chain management. Advanced Technologies. We provide services utilizing advanced technologies which we believe allow us to differentiate ourselves from ourcompetitors. These advanced technologies include the fabrication of complex printed circuit boards, backplanes, enclosures, precision machining, plasticsand die cast components. For example, we produce some of the most advanced printed circuit boards and backplanes in the world, with up to 70 layers andprocess capabilities including a range of low signal loss, high performance materials, buried capacitors and resistors, high-density interconnects and microvia technology. We also manufacture high-density flex and rigid-flex printed circuit boards with up to 30 layers and 8 transition layers in support of defenseand aerospace markets along with high-end medical electronics. Our printed circuit board assembly technologies include micro ball grid arrays, fine-pitch discretes and small form factor radio frequency andoptical components, as well as advanced packaging technologies used in high pin count application-specific integrated circuits and network processors. Weuse innovative design solutions and advanced metal forming techniques to develop and fabricate high-performance indoor and outdoor chassis, enclosures andframes. Our assembly services use advanced technologies including precision optical alignment, multi-axis precision stages and machine vision technologies.We use sophisticated procurement and production management tools to effectively manage inventories for our customers and ourselves. We also have developedbuild-to-order (BTO) and configure-to-order (CTO) systems and processes that enable us to manufacture and ship finished systems within 48 to 72 hoursafter receipt of an order. We utilize a centralized IMS technology council to coordinate the development and introduction of new technologies to meet ourcustomers' needs in various locations and to increase collaboration among our facilities. Global Manufacturing Capabilities. Most of our customers compete and sell their products on a global basis. As such, they require globalsolutions that include regional manufacturing for selected end markets, especially when time to market, local manufacturing or content and low cost solutionsare critical objectives. Our global network of facilities in 25 countries provides our customers a combination of sites to maximize both the benefits of regionaland low cost manufacturing solutions and repair services. Our repair partners are located in an additional 21 countries.We offer customers five regions where all of our technology and components, integrated manufacturing and logistics solutions can be implementedand can serve both regional and global business needs. To manage and coordinate our global operations, we employ an enterprise-wide ERP system atsubstantially all of our manufacturing locations that operates on a single IT platform and provides us with company-wide information regarding componentinventories and orders. This system enables us to standardize planning and purchasing at the facility level and to optimize inventory management andutilization worldwide. Our systems also enable our customers to receive key information regarding the status of their programs. We purchase large quantities of electronic components and other materials from a wide range of suppliers. Our primary supply chain goal is toconsolidate our global spend to create the synergy and leverage to drive our supply base for better cost competitiveness, more favorable terms and leading-edgesupply chain solutions. As a result, we often receive more favorable terms and supply chain solutions from suppliers, which can enable us to provide ourcustomers with greater total cost reductions than they could obtain themselves. Our strong supplier relationships also often enable us to obtain electronic6Table of Contentscomponents and other materials that are in short supply as well as provide us the necessary support to optimize the use of our inventories. Supply chain management also involves the planning, purchasing and warehousing of product components. The other objective of our supply chainmanagement services is to reduce excess component inventory in the supply chain by scheduling deliveries of components at a competitive price and on a just-in-time basis. We use sophisticated production management systems to manage our procurement and manufacturing processes in an efficient and cost effectivemanner. We collaborate with our customers to enable us to respond to their changing component requirements and to reflect any changes in these requirementsin our production management systems. These systems enable us to forecast future supply and demand imbalances and develop strategies to help ourcustomers manage their component requirements. Our enterprise-wide ERP systems provide us with company-wide information regarding componentinventories and orders to optimize inventories, planning and purchasing at the facility level.Customer-Focused Organization. We believe customer relationships are critical to our success and we are focused on providing a high level ofcustomer service. Our key customer accounts are managed by dedicated account teams including a global business manager directly responsible for accountmanagement. Global business managers coordinate activities across divisions to effectively satisfy our customers' requirements and have direct access to oursenior management to quickly address customer opportunities and needs. Local customer account teams further support the global teams and are linked by acomprehensive communications and information management infrastructure. Expertise in Serving Diverse End Markets. We have experience in serving our customers in the communications, computing and storage,multimedia, industrial and semiconductor capital equipment, defense and aerospace, medical, CleanTech and automotive markets. Our diversification acrossend markets reduces our dependence upon any one customer or segment. In order to cater to the specialized needs of customers in particular market segments,we have dedicated personnel, and in some cases facilities, with industry-specific capabilities and expertise. We also maintain compliance with industrystandards and regulatory requirements applicable to certain markets including, among others, the medical and defense and aerospace sectors. Our Products and Solutions We offer our OEM customers a diverse set of products and solutions with a focus on wireless, wireline and optical communications and networkinfrastructure equipment like switches, routers and base stations, computing and storage systems, defense and commercial avionics and communications,medical imaging, diagnostic and patient monitoring systems, digital satellite set-top boxes, point-of-sale, gaming systems, semiconductor tools for metrology,lithography, dry and wet processing, industrial products like large format printers and cash transaction machines, and CleanTech products such as solar andwind products, fuel cells, LED lighting, smart meters and battery systems. These products may require us to use some or all of our end-to-end solutionsincluding design, component technologies and logistics and repair services.Integrated Manufacturing Solutions includes: Printed Circuit Board Assembly and Test. Printed circuit board assembly involves attaching electronic components, such as integratedcircuits, capacitors, microprocessors, resistors and memory modules to printed circuit boards. The most common technologies used to attachcomponents to printed circuit boards employ surface mount technology (SMT) and pin-through-hole assembly (PTH). SMT is an automatedassembly system that places and solders components to the printed circuit board. In PTH, components are inserted into holes punched in the circuitboard. Another method is press-fit-technology, in which components are pressed into connectors affixed to the printed circuit board. We use SMT,PTH, press-fit as well as new attachment technologies that are focused on miniaturization and increasing the density of component placement onprinted circuit boards. These technologies, which support the needs of our customers to provide greater functionality in smaller products, includechip-scale packaging, ball grid array, direct chip attach and high density interconnect. We perform in-circuit and functional testing of printed circuitboard assemblies. In-circuit testing verifies all components are properly inserted, attached and the electrical circuits are complete. We performfunctional tests to confirm the board or assembly operates in accordance with its final design and manufacturing specifications. We either design andprocure test fixtures and develop our own test software, or we use our customers' test fixtures and test software. In addition, we provideenvironmental stress tests of the board or assembly that are designed to confirm that the board or assembly will meet the environmental stresses,such as heat, to which it will be subject.Final System Assembly and Test. We provide final system assembly and test in which assemblies and modules are combined to formcomplete, finished products. Products for which we currently provide final system assembly and7Table of Contentstest include wireless base stations, wireline communications switches, optical networking products, high-end servers, industrial and automotive,LED lighting fixtures, multimedia devices, diagnostic medical equipment, internet-protocol communication systems, set-top boxes and computingand storage. We often integrate Sanmina-manufactured printed circuit board assemblies with enclosures, cables and memory modules we alsoproduce. Our final assembly activities also may involve integrating components and modules that others manufacture. The complex, finishedproducts we produce typically require extensive test protocols. We offer both functional and environmental test services. We also test products forconformity to applicable industry, product integrity and regulatory standards. Our test engineering expertise enables us to design functional testprocesses that assess critical performance elements including hardware, software and reliability. By incorporating rigorous test processes into themanufacturing process, we can help assure our customers that their products will function as designed.Direct-Order-Fulfillment. We provide direct-order-fulfillment for our OEM customers. Direct-order-fulfillment involves receiving customerorders, configuring products to quickly fill the orders and delivering the products either to the OEM, a distribution channel, such as a retail outlet,or directly to the end customer. We manage our direct-order-fulfillment processes using a core set of common systems and processes that receive orderinformation from the customer and provide comprehensive supply chain management including procurement and production planning. Thesesystems and processes enable us to process orders for multiple system configurations and varying production quantities including single units. Ourdirect-order-fulfillment services include BTO and CTO capabilities: in BTO, we build a system with the particular configuration ordered by theOEM customer; in CTO, we configure systems to an end customer's order. The end customer typically places this order by choosing from a varietyof possible system configurations and options. Using advanced manufacturing processes and a real-time warehouse management and data controlsystem on the manufacturing floor, we can meet a 48 to 72 hour turn-around-time for BTO and CTO requests. We support our direct-order-fulfillment services with logistics that include delivery of parts and assemblies to the final assembly site, distribution and shipment of finishedsystems and processing of customer returns. Our systems are sufficiently flexible to support direct-order-fulfillment for a variety of products, suchas servers, workstations, set-top boxes and medical devices.Components, Products and Services includes: Product Design and Engineering. Our design and engineering groups provide customers with comprehensive services from initial productdesign and detailed product development to production launch and end-of-life support for a wide range of products covering all our market segments.These groups complement our vertically integrated manufacturing capabilities by providing manufacturing design services for printed circuitboards, backplanes and a variety of electro-mechanical systems. Our offerings in design engineering include product architecture, development,integration and regulatory and qualification services, while our NPI services include quick-turn prototype, functional test development and release-to-volume production. We specialize in creating custom high-performance, manufacturable, cost-optimized products. We can also complement ourcustomer's design team with our unique skills and services. Both solutions accelerate our customer's market penetration, all while respecting thecustomer's intellectual property (IP).Printed Circuit Boards. We have the ability to produce multilayer printed circuit boards on a global basis with high layer counts and fine linecircuitry. Our ability to support NPI and quickturn fabrication followed by manufacturing in both North America and Asia allows our customers toaccelerate their time-to-market as well as their time-to-volume. Standardized processes and procedures make transitioning of products easier for ourcustomers. Our technology roadmaps provide leading-edge capabilities and higher yielding processes. Engineering teams are available on a world-wide basis to support designers in Design for Manufacturability (DFM) analysis and assemblers with field application support. Printed circuit boards are made of fiberglass/resin- laminated material layers and contain copper circuits which interconnect and transmitelectrical signals among the components that make up electronic devices. Increasing the density of the circuitry in each layer is accomplished byreducing the width of the circuit tracks and placing them closer together in the printed circuit board along with adding layers and via hole structures.We are currently capable of efficiently producing printed circuit boards with up to 70 layers and circuit trace widths as narrow as two mils (50micron) in production volumes. Specialized production equipment along with an in-depth understanding of high performance laminate materialsallow for fabrication of some of the largest form factor and highest speed (in excess of 20 gigabits per second, or Gbps) backplanes available in theindustry. We have also developed several proprietary technologies and processes which improve electrical performance, connection densities andreliability of printed circuit boards. Some of these technologies, such as Buried Capacitance™, have become industry standards and are licensed toother board fabricators.8Table of Contents Backplanes and Backplane Assemblies. Backplanes are very large printed circuit boards that serve as the backbones of sophisticatedelectronics products. They provide interconnections for printed circuit boards, integrated circuits and other electronic components. We fabricatebackplanes in our printed circuit board plants. Backplane fabrication is significantly more complex than printed circuit board fabrication due to thelarge size and thickness of the backplanes. We manufacture backplane assemblies by press-fitting high density connectors into plated through-holesin the bare backplane. In addition, many of the newer, advanced technology backplanes require SMT attachment of passive discrete components aswell as high-pin count ball grid array packages. These advanced assembly processes require specialized equipment and a strong focus on qualityand process control. We also perform in-circuit and functional tests on backplane assemblies. We have developed proprietary technology and “know-how” which enable backplanes to run at data rates in excess of 10 Gbps. We currently have capabilities to manufacture backplanes with greater than60 layers in sizes of 26x40 or 22x52 inches and up to 0.5 inches in thickness, using a wide variety of high performance laminate materials. Theseare among the largest and most complex commercially manufactured backplanes. We are one of a limited number of manufacturers with thesecapabilities. Cable Assemblies. Cable assemblies are used to connect modules, assemblies and subassemblies into electronic devices. We provide a broadrange of cable assembly products and services, from cable assemblies and harnesses for automobiles, to complex harnesses for industrial productsand semiconductor manufacturing equipment. We design and manufacture a broad range of high-speed data, radio frequency and fiber optic cablingproducts. Our cable assemblies are often used in large rack systems to interconnect subsystems and modules. Mechanical Systems. Mechanical systems are used across all major markets to house and protect complex and fragile electronic components,modules and sub-systems, so that the system's functional performance is not compromised due to mechanical, environmental or any other usageconditions. Our mechanical systems manufacturing services are capable of fabricating mechanical components, such as cabinets, chassis (soft tooland hard progressive tools), frames, racks, and data centers integrated with various electronic components and sub-systems for power management,thermal management, sensing functions and control systems.We manufacture a broad range of enclosures for a wide range of products including multimedia products, set-top boxes, medical equipment,storage and servers, to large and highly complex mechanical systems, such as those used in indoor and outdoor wireless base station products andhigh precision chambers for semiconductor industry.We serve a variety of market segments, such as telecommunications, computing, semiconductor, industrial, CleanTech, and medical, whilepartnering with customers from initial concept development, prototyping, build verification and validation, to integration, system assembly, finaltest and service.Our mechanical systems expertise is readily accessible at any of our state-of-the-art facilities worldwide. Our operations provide metalfabrication by soft tools, high-volume metal stamping and forging by hard tools with stage and progressive tools, plastic injection molding,aluminum die-casting, robotic welding capabilities, powder painting, wet painting, plating, cleaning processes and leading precision machiningcapabilities. We also offer a suite of world-class precision machining services in the U.S. and China. We use advanced numerically controlled machinesenabling the manufacture of components to very tight tolerances and the assembly of these components in clean environments. Capabilities includecomplex medium- and large-format mill and lathe machining of aluminum, stainless steel, plastics, ferrous and nonferrous alloys and exotic alloys.We also have helium and hydrostatic leak-test capabilities. By leveraging our established supply chain, we do lapping, plating, anodizing, electricaldischarge machining (EDM), heat-treating, cleaning, laser inspection, painting and packaging. We have dedicated facilities supporting machiningand complex integration with access to a range of state-of-the-art, computer-controlled machining equipment that can satisfy rigorous demands forproduction and quality. This includes fully automated “lights-out” machinery that continues production in the absence of human operators. Withsome of the largest horizontal milling machines in the U.S., we are a supplier of vacuum chamber systems for the semiconductor, flat-panel display,LED equipment, industrial and AS0100-certified, aerospace markets.Viking Technology. Viking Technology is a global provider of Non-Volatile memory, Solid State Drives (SSD) and DRAM solutions withover two decades of engineering experience and expertise in flash and DRAM modules, advanced packaging & complex sub-system solutions.Viking's mission and philosophy is to continue to deliver leading-edge technology solutions that optimize the value and performance of its customers’applications.9Table of ContentsViking's breadth of products bridge the SSD and DRAM technologies to deliver any storage solution: from high-performance computing SSDstailored for the Enterprise market to small form factor flash and DRAM modules optimized for the industrial, communications and defense andaerospace markets.In recent years, Viking has pioneered several disruptive technologies that are paving the way for faster and more effective enterprise server andstorage system solutions. Such innovations include a new Non-Volatile memory module, ArxCis-NV™. The ArxCis-NV™, an NV-DIMM, enablessignificant performance improvements to a host of end applications, while delivering increased endurance to any SSD. NV-DIMM technology will bea critical component for the evolving Cloud and Virtualization markets to ensure reliability, persistence and performance. Another disruptivetechnology is the innovative SATADIMM™, an SSD in the form of a Dual In-Line Memory Module (DIMM). Using Viking's state-of-the-art designand packaging technology, the SATADIMM™ is able to deliver all the performance, capacity and features of an Enterprise SSD within 75% of thefootprint of a traditional 2.5-inch SSD. With its innovative form factor, the SATADIMM™ enables the large growing server market to takeadvantage of increased performance and capacity to enhance critical business applications.SCI Technology Inc. (SCI) - Defense and Aerospace. SCI has been providing engineering services, products and manufacturing solutionsto the global defense and aerospace industry for more than five decades. SCI offers mission-critical products for aircraft systems, tacticalcommunications and radiation detection and monitoring, as well as fiber optics capabilities for use in a variety of applications.Our customers include U.S. government agencies, U.S. allies and major defense and aerospace prime contractors. We also have theinfrastructure to support the stringent certifications, regulations, processes and procedures required by these customers.Newisys. Our Newisys group designs and manufactures both standard and custom storage and server products, including mass storage forhigh performance cloud and streaming video applications, as well as bulk and backup storage products. Newisys designs and produces storage andserver products, including complete rack scale solutions.Optical and RF and Components and Modules. Optical and Radio frequency (RF) components are the key building blocks of manysystems. We produce both passive and active components as well as modules. RF and Optical modules are integrated subsystems that use acombination of industry standard and/or custom components, interconnected using microelectronic technologies to achieve a unique function. Basedon our microelectronic design and manufacturing technologies, we provide RF and optical components, modules and systems for customers in thetelecommunications, networking, medical, industrial, military and aerospace markets. Our experience in RF and optical communications andnetworking products spans long-haul/ultra-long-haul and metro regions for transport/transmission, as well as access and switching applications,including last-mile solutions. In the medical market, we develop and manufacture optically-based products such as blood analyzers and foodcontamination analyzers as well as specialized spectrometers. We are currently supplying product to the 10G, 40G and 100G optical marketplacebased on our optical and RF technologies. Our service offerings for optical customers are designed to deliver end-to-end solutions with special focuson product design and industrialization, optical and RF component, module and blade manufacturing, as well as system integration and test.Logistics and Repair Services. Our logistics and repair services provide significant value to our customers while helping protect their brandname. It also improves customer experience through the deployment of enhanced tools and the provision of real-time access to critical businessinformation. Our solutions are designed to reduce the total cost of ownership and enable our customers to shift their services operations to a variablecost model that frees up cash, enabling them to focus on their core business initiatives.Focusing on highly complex and mission-critical products and processes, we support the logistics and repair needs of customers in themedical, communications, computing & storage, defense and aerospace and multimedia markets worldwide. Through our operational infrastructureof more than 20 locations and repair partners in an additional 21 countries, we provide a wide range of services including direct-order-fulfillment,configure-to-order, supplier, inventory and warranty management, reverse logistics, repair, asset recovery, sustaining engineering, test developmentand end-of-life management to embrace the most unique needs of our customers.Drawing on a robust set of information systems, we offer configurable environments tailored to meet specific customer needs includingcustomized web portals, order and serial number tracking, special routings and promotions. Local, regional and global solutions are supported by arobust set of business processes that focus on inventory reduction and risk mitigation. This can improve cycle times by leveraging infrastructure,people and10Table of Contentstechnology to enable reliable shipments of products to end users worldwide generally within 4 to 72 hours, depending on the services offered.Logistics and repair services complement our end-to-end manufacturing strategy by integrating engineering, supply chain, manufacturing,logistics and repairs into a seamless solution for mission-critical customers around the world. Our End Markets We target markets that we believe offer significant growth opportunities and for which OEMs sell complex products that are subject to rapidtechnological change. We believe that markets involving complex, rapidly changing products offer opportunities to produce products with higher marginsbecause they require higher value-added manufacturing services and may also include our advanced vertically integrated components. Our approach to ourtarget markets is two-fold; we intend to strengthen our significant presence in the communications networks and computing and storage markets, while alsofocusing on under-penetrated target markets which have not extensively relied upon EMS companies in the past, including the medical, automotive, industrialand semiconductor capital equipment, defense and aerospace, and CleanTech industries. Our diversification across market segments and customers helpsmitigate our dependence on any particular market or customer. Communications Networks: Wireless and Wireline Access, Optical and Wireline Routing, Switching, and Transmission and EnterpriseNetworking. In the communications sector, we focus on infrastructure equipment including wireless and wireline access, radio frequency (RF) filters,switching, routing and transmission systems, optical networking and transmission and enterprise networking systems. Our product design and engineeringstaff has extensive experience designing and industrializing advanced communications products and components for these markets. Products we manufactureinclude wireless base stations, remote radio heads, point-to-point microwave systems and other backhaul solutions, satellite receivers and various radiofrequency appliances, optical switches and transmission hardware as well as switches core, service and edge routers among others. We also design andmanufacture optical, RF and microelectronic components which enable devices in many of these products. Computing and Storage. We provide comprehensive design and manufacturing solutions, as well as BTO and CTO services to the computing andstorage market. We tightly couple our vertically integrated supply chain with manufacturing and logistics allowing for assembly and distribution of productsall over the world. Our vertical integration capabilities include racks, enclosures, cables, complex multi-layer printed circuit boards, printed circuit assembliesand backplanes. In addition, we have designed and developed some of the most compact and powerful storage modules available on the market today whichwe have coupled with our global, vertically integrated supply chain to deliver some of the most compelling computing and storage solutions to the data storageindustry. Multimedia. We manufacture digital set-top boxes, point of sale equipment, casino gaming equipment, digital home gateways, professional audio-video equipment and internet protocol entertainment devices. For our multimedia OEM customers, we manage the production process including product designand engineering, test development, supply chain management, manufacturing of printed circuit boards and assemblies, final system assembly and test,direct-order-fulfillment together with our BTO and CTO capabilities, and repair services.Industrial and Semiconductor Capital Equipment. Our expertise in manufacturing highly complex systems includes production of industrialand semiconductor capital equipment, front-end environmental chambers, industrial controllers and test, inspection and public safety equipment. We alsohave significant experience in manufacturing highly complex systems such as process chambers, photolithography tools, etch tools, wafer handlinginterfaces, flat panel display test and repair equipment, chem-mech planarization tools, optical inspection and x-ray equipment, explosive detection equipment,and large format printing plate machines as well as full design and manufacturing capabilities on precision frames for all capital equipment. Defense and Aerospace. We offer our end-to-end services to the defense and aerospace industry. We design and manufacture a comprehensive rangeof defense and aerospace products including avionics systems and processors, cockpit and wireless communications systems, tactical and secure networkcommunications systems, radar subsystems, radiation detection systems for homeland defense and fiber-optic systems. We believe our experience in servingthe defense and aerospace industry, as well as our product design and engineering capabilities, represent our key competitive strengths.Medical. We provide comprehensive manufacturing and related services to the medical industry including design, logistics and regulatory approvalsupport. The manufacturing of products for the medical industry often requires compliance with domestic and foreign regulations including the Food andDrug Administration's (FDA's) quality system regulations and the11Table of ContentsEuropean Union's medical device directive. In addition to complying with these standards, our medical manufacturing facilities comply with ISO 13485-2012(formerly EN 46002) and ISO 9001:2000. We manufacture a broad range of medical devices including blood glucose meters, computed tomography scannerassemblies, respiration systems, blood analyzers, cosmetic surgery systems, ultrasound imaging systems and a variety of patient monitoring equipment.Clean Technology. We are committed to serving companies leading the CleanTech revolution in the solar, wind, fuel cell, battery systems, LEDlighting and smart infrastructure industries. We leverage traditional electronics manufacturing services (EMS) for CleanTech customers in areas related topower electronics, control and distribution, smart meters and full-system integration. Beyond traditional EMS, our extensive range of electro-mechanicaldesign and complex system manufacturing capabilities are an excellent fit across all CleanTech segments. Our design and manufacturing operations arestrategically located in close proximity to CleanTech business hubs. Automotive. In the automotive industry, we manufacture different types of sensors, body controllers, engine control units, radios, heatingventilation and air-conditioning (HVAC) control heads and blower modules as well as cables for entertainment solutions. We also provide design support,product and process qualification, manufacturing, supply chain management, supplier quality assurance and end-of-life services. All our automotivededicated factories are TS 16949 certified and provide printed circuit boards, printed circuit board assemblies and cables as well as final systems. Customers A relatively small number of customers have historically generated a significant portion of our net sales. Sales to our ten largest customersrepresented approximately 50% of our net sales in 2013, 2012 and 2011. In 2013 and 2012, Alcatel-Lucent represented more than 10% of our net sales. In2011, Nokia Siemens Networks represented more than 10% of our net sales. We seek to establish and maintain long-term relationships with our customers, as we have served many of our principal customers for several years.Historically, we have had substantial recurring sales from existing customers. We also expand our customer base through our marketing and sales efforts aswell as acquisitions. We have been successful in broadening relationships with customers by providing vertically integrated products and services as well asmultiple products and services in multiple locations. We typically enter into supply agreements with our major OEM customers with terms ranging from three to five years. Our supply agreements withour OEM customers generally do not obligate the customer to purchase minimum quantities of products. However, the customer is typically liable for the costof the materials and components we have ordered to meet their production forecast but which are not used, provided that the material was ordered inaccordance with an agreed-upon procurement plan. In some cases, the procurement plan contains provisions regarding the types of materials for which ourcustomers will assume responsibility. Our supply agreements typically contain provisions permitting cancellation and rescheduling of orders upon notice and,in some cases, subject to cancellation and rescheduling charges. Order cancellation charges typically vary by product type, depending how far in advance ofshipment a customer notifies us of an order cancellation. In some circumstances, our supply agreements with customers provide for cost reduction objectivesduring the term of the agreement. We generally do not obtain firm, long-term commitments from our customers under supply agreements. As a result, customers can cancel theirorders, change production quantities or delay orders. Uncertain economic conditions and our general lack of long-term purchase contracts with our customersmake it difficult for us to accurately predict revenue over the long-term. Even in those cases in which customers are contractually obligated to purchaseproducts from us or repurchase unused inventory from us that we have ordered for them, we may elect not to immediately enforce our contractual rightsbecause of the long-term nature of our customer relationships or for other business reasons and may instead negotiate accommodations with customersregarding particular situations.SeasonalityAlthough we have in the past experienced higher levels of sales during different quarters, we have in the recent past perceived that the second half ofour fiscal year experiences higher levels of revenue, with our first half generally having the lowest levels. However, we cannot predict whether this pattern willcontinue as seasonality in our business has historically been driven by customer and product mix, particularly in the end markets which our customers serve.12Table of ContentsBacklog We generally do not obtain firm, long-term commitments from our customers. Instead, our procurement of inventory and our manufacturingactivities are based primarily on forecasts provided by our customers. This enables us to minimize the time lapse between receipt of a customer's order anddelivery of product to the customer. Customers usually do not make firm orders for product delivery more than thirty to ninety days in advance. Additionally,customers may cancel or postpone scheduled deliveries, generally without significant penalty. Therefore, we do not believe the backlog of expected productsales covered by firm orders is a meaningful measure of future sales. Marketing and Sales Our sales efforts are organized and managed on a regional basis with regional sales managers in geographic regions throughout the world. We develop relationships with our customers and market our vertically integrated manufacturing solutions through our direct sales force, customersupport specialists and representative firms. Our sales resources are directed at multiple management and staff levels within target accounts. Our direct salespersonnel and representative firms work closely with the customers' engineering and technical personnel to better understand their requirements. Our marketingand sales staff supports our business strategy of providing end-to-end solutions by encouraging cross-selling of vertically integrated manufacturing solutionsand component manufacturing across a broad range of major OEM products. To achieve this objective, our marketing and sales staff works closely with ourvarious manufacturing and design and engineering groups and engages in marketing and sales activities targeted at key customer opportunities. Each of our key customer accounts is managed by a dedicated account team including a global business manager directly responsible for accountmanagement. Global business managers coordinate activities across divisions to effectively satisfy customer requirements and have direct access to our seniormanagement to quickly address customer concerns. Local customer account teams further support the global teams and are linked by a comprehensivecommunications and information management infrastructure.Business Segment Data and our Foreign OperationsWe have one reportable segment - Integrated Manufacturing Solutions (IMS). Financial information for segments can be found in note 16 to ourconsolidated financial statements. Information concerning revenues, results of operations and revenues by geographic area is set forth in Item 7,“Management's Discussion and Analysis of Financial Condition and Results of Operations” and in Note 16, “Business Segment, Geographic and CustomerInformation”, to our consolidated financial statements. Risks attendant to our foreign operations can be found in Item 1A. “Risk Factors”.Competition For our integrated manufacturing solutions business, we face competition from other major global EMS companies such as Benchmark Electronics,Inc., Celestica, Inc., Flextronics International Ltd., Jabil Circuits, Inc. and Plexus Corp. Our components, products and services business faces competitionfrom EMS and non-EMS companies that often have a regional product, service or industry-specific focus. In addition, our potential customers may alsocompare the benefits of outsourcing their manufacturing to us with the merits of manufacturing products themselves. We compete with different companies depending on the type of solution or geographic area. We believe the primary competitive factors in our industryinclude manufacturing technology, quality, global footprint, delivery, responsiveness, provision of value-added solutions and price. We believe our primarycompetitive strengths include our ability to provide global end-to-end solutions, product design and engineering resources, vertically integrated manufacturingsolutions, advanced technologies, global manufacturing capabilities, global supplier base, customer focus and responsiveness, and expertise in servingdiverse end markets.Intellectual Property We hold various U.S. and foreign patents and patent applications primarily related to printed circuit board technologies, methods of manufacturingprinted circuit boards, enclosures, memory modules and computing (servers and storage). For other proprietary processes, we rely primarily on trade secretprotection. We also have registered trademarks and pending applications in the U.S. and certain countries worldwide. A number of our patents covering certaintechnologies have13Table of Contentsexpired or will expire in the near future. The expiration and abandonment of patents reduces our ability to assert claims against competitors or others who usesimilar technologies and to license such patents to third parties.Environmental Matters We are subject to a variety of local, state, federal and foreign environmental laws and regulations relating to the storage and use of hazardousmaterials used in our manufacturing processes, as well as the storage, treatment, discharge, emission and disposal of hazardous waste that are by-products ofthese processes. We are also subject to occupational safety and health laws, product labeling and product content requirements, either directly or as required byour customers. Proper waste disposal is a major consideration for printed circuit board manufacturers due to the metals and chemicals used in themanufacturing process. Water used in the printed circuit board manufacturing process must be treated to remove metal particles and other contaminants beforeit can be discharged into municipal sanitary sewer systems. We operate on-site wastewater treatment systems at our printed circuit board manufacturing plantsin order to treat wastewater generated in the fabrication process. Although the electronics assembly process generates significantly less wastewater than printed circuit board fabrication, it can also generate leaddust. As a result, it is important to maintain environmental controls. Upon vacating a facility, we are responsible for remediating the lead dust from the interiorof the manufacturing facility. Although there are no applicable standards for lead dust remediation in manufacturing facilities, we endeavor to remove theresidues. To date, lead dust remediation costs have not been material to our results of operations. We also monitor for airborne concentrations of lead in ourbuildings and are unaware of any significant lead concentrations in excess of the applicable OSHA or other local standards.We have a range of corporate programs that aim to reduce the use of hazardous materials in manufacturing. We developed corporate-widestandardized environmental management systems, auditing programs and policies to enable better management of environmental compliance activities. Forexample, our facilities are also certified under ISO 14001, a set of standards and procedures relating to environmental compliance management. In addition, theelectronics industry must adhere to the European Union's Restrictions of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment(WEEE) directives which are in effect since July 2006. Parallel initiatives have been adopted in other jurisdictions, including several states in the U.S. and thePeoples' Republic of China. RoHS limits the use of lead, mercury and other specified substances in electronics products. WEEE requires producers to assumeresponsibility for the collection, recycling and management of waste electronic products and components. We implemented procedures intended to ensure ourmanufacturing processes are compliant with RoHS and the European Union's Registration, Evaluation and Authorization of Chemicals (REACH) legislation,when required. WEEE compliance is primarily the responsibility of OEMs.Asbestos containing materials, or ACM, are present at several of our manufacturing facilities. Although the ACM is being managed and controlshave been put in place pursuant to ACM operations and maintenance plans, the presence of ACM could give rise to remediation obligations and otherliabilities. Our facilities generally operate under environmental permits issued by governmental authorities. For the most part, these permits must be renewedperiodically and are subject to revocation in the event of violations of environmental laws. Any such revocation may require us to cease or limit production atone or more of our facilities, adversely affecting our results of operations.Due to certain acquisitions, we have incurred liabilities associated with environmental contamination. These include ongoing investigation andremediation activities at a number of current and former sites, including Irvine, California; Owego, New York; Derry, New Hampshire; and Brockville,Ontario. In addition, we have been named in a lawsuit alleging operations at our current and former facilities in Orange County, California contributed togroundwater contamination. There are some sites, including our acquired facility in Gunzenhausen, Germany, that are known to have groundwatercontamination caused by a third-party, and that third-party has provided indemnification to us for the liability. However, third-party indemnities may not beeffective to reduce our liability for environmental contamination. For example, Nortel Networks which had provided us indemnification with respect toenvironmental investigation activities undertaken at our former Brockville site is party to bankruptcy proceedings that may cause it to not fully honor itsindemnification obligations to us. As a result, we could be required to absorb the full expense of any remediation of the Brockville facility.We have also been named as a potentially responsible party at a contaminated disposal site operated by another party at the Casmalia Resourcesdisposal site in Southern California as a result of the past disposal of hazardous waste by companies we have acquired or by our corporate predecessors. Inaddition, we have been named as a potentially responsible party by the California Department of Toxic Substance Control at a waste treatment site operated byanother party in San Jose, California,14Table of Contentsallegedly as a result of waste we sent to be treated at that facility being discharged into the environment. Although liabilities for such historic disposal activitieshave not materially affected our financial condition to date, we cannot assure past disposal activities will not result in liability that will affect us in the future.In addition, we may be unaware of further environmental compliance issues, which could adversely affect our future operations.We use environmental consultants primarily for risk assessments and remediation, including remedial investigation and feasibility studies, remedialaction planning and design and site remediation. Our consultants provide information regarding the nature and extent of site contamination, acceptableremediation alternatives and estimated costs associated with each remediation alternative. We consider their recommendations together with other informationwhen determining the appropriate amount to accrue for environmental liabilities. Employees As of September 28, 2013, we had 40,909 employees, including 7,765 temporary employees. None of our U.S. employees are represented by alabor union. In some international locations, our employees are represented by labor unions on either a national or plant level or are subject to collectivebargaining agreements. Some foreign countries also have mandatory legal provisions regarding terms of employment, severance compensation and otherconditions of employment that are more restrictive than U.S. laws. Available Information Our Internet address is http://www.sanmina.com. We make available through our website, free of charge, our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of theSecurities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securitiesand Exchange Commission, or SEC. All reports we file with the SEC are also available free of charge via EDGAR through the SEC's website athttp://www.sec.gov.15Table of ContentsEXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth the name, position and age of our current executive officers and their ages as of September 28, 2013. NameAgePositionJure Sola62Chairman of the Board and Chief Executive OfficerRobert Eulau51Executive Vice President and Chief Financial OfficerCharles Kostalnick48Executive Vice President and Chief Business OfficerDennis Young62Executive Vice President of Worldwide Sales and MarketingAlan Reid50Executive Vice President of Global Human Resources Jure Sola has served as our Chief Executive Officer since April 1991, as Chairman of our Board of Directors from April 1991 to December 2001and from December 2002 to present, and as Co-Chairman of our Board of Directors from December 2001 to December 2002. In 1980, Mr. Sola co-foundedSanmina and initially held the position of Vice President of Sales. In October 1987, he became the Vice President and General Manager of Sanmina,responsible for manufacturing operations, sales and marketing. Mr. Sola served as our President from October 1989 to March 1996. Robert Eulau has served as our Executive Vice President and Chief Financial Officer since September 2009. Prior to joining us, he was theExecutive Vice President, Chief Operating Officer and Chief Financial Officer of privately-owned Alien Technology Corporation, a developer of radiofrequency identification products, from March 2006 to June 2008. Previously, he was Senior Vice President and Chief Financial Officer of publicly-tradedRambus Inc., a technology licensing company, from May 2001 to March 2006. Prior to Rambus, Mr. Eulau served over 15 years with Hewlett PackardCompany in various leadership roles, including Vice President and Chief Financial Officer of HP's Business Customer Organization, and Vice President andChief Financial Officer of HP's Computing Products business. Charles Kostalnick has served as our Executive Vice President and Chief Business Officer since September 2013. Prior to joining us, he was theSenior Vice President of Avnet, Inc, a distributor of electronic components, computer products and embedded technology, from July 2010 to September 2013.Previously, he was President of North America Distribution and held other leadership roles at Bell Micoproducts, Inc. (acquired by Avnet, Inc. in July 2010),a distributor of storage products and systems, computer products and peripherals, from October 2005 to July 2010. Prior to Bell Microproducts, Mr.Kostalnick held various roles at Arrow Electronics, including Vice President of Sales, OEM Computing Solutions, Area Director and Regional Director, fromMarch 2000 to October 2005. Dennis Young has served as our Executive Vice President of Worldwide Sales and Marketing since March 2003. Prior to joining us, Mr. Young wasSenior Vice President of Sales from May 2002 to March 2003 and Vice President of Sales, from March 1998 to May 2002, of Pioneer-Standard Electronics, aprovider of industrial and consumer electronic products.Alan Reid has served as our Executive Vice President of Global Human Resources since October 2012. Mr. Reid has held various roles at Sanmina,including Senior Vice President of Global Human Resources and Human Resources Director of EMEA, from July 2001 to October 2012. Prior to joining us, hewas Group Human Resources Manager at Kymata Ltd., an optoelectronic technology startup from June 2000 to July 2001. Prior to Kymata, Mr. Reid heldvarious roles in operations and human resources with The BOC Group PLC., (British Oxygen Company), a global industrial gases and engineering company,from September 1986 to June 2000. 16Table of ContentsItem 1A. Risk FactorsAdverse market conditions in the electronics industry could reduce our future sales and earnings per share. We cannot accurately predict future levels of demand for our customers' electronics products. Consequently, our past operating results, earnings andcash flows may not be indicative of our future operating results, earnings and cash flows. Adverse worldwide economic conditions, particularly in Europe,have in the recent past led to challenging conditions in the electronics industry. A number of factors, including price instability, the availability and cost ofcredit, high global unemployment and concerns about the stability and solvency of financial institutions, financial markets, businesses, and sovereignnations have slowed global economic growth in many countries. These conditions have resulted in some of our customers delaying purchases or placingpurchase orders for lower volumes of products than previously experienced or anticipated. If such conditions persist or return, they could also cause areduction in orders from our customers or potential customers due to a reduced availability of credit and the insolvency of one or more customers or suppliers.Any of these factors could reduce our revenues, increase our costs and decrease our liquidity. Our customers could experience credit problems, which would reduce our future revenues and net income.Many of the industries for which we provide products have previously experienced significant financial difficulty, with some of the participantsfiling for bankruptcy. Such financial difficulty, if experienced by one or more of our customers, may negatively affect our business due to the decreaseddemand from these financially distressed customers, the lengthening of customer payment terms, the potential inability of these companies to make fullpayment on amounts owed to us or to purchase inventory we acquired to support their businesses. For example, during 2013, we recorded charges of $6.6million relating to a distressed customer. Customer bankruptcies also entail the risk of potential recovery by the bankruptcy estate of amounts previously paidto us that are deemed a preference under bankruptcy laws. We do not carry insurance against the risk of customer default on their payment obligations to us.We seek to mitigate the impact of collection problems with our customers on our financial results by evaluating their creditworthiness on an ongoingbasis and by maintaining an allowance for doubtful accounts that is assessed for adequacy quarterly. However, should customer defaults increasesubstantially or exceed the level of our allowance, our revenue, net income and cash position would be reduced, perhaps significantly. We rely on a relatively small number of customers for a substantial portion of our sales, and declines in sales to these customers would reduce ournet sales and net income. Sales to our ten largest customers represented approximately half of our net sales during 2013. We expect to continue to depend upon a relatively smallnumber of customers for a significant percentage of our sales, particularly in the communications end market. A significant reduction in sales to any of ourlarge customers or significant pricing and margin pressures exerted by our large customers would adversely affect our operating results. In the past, some ofour large customers have significantly reduced or delayed the volume of manufacturing services ordered from us as a result of changes in demand for theirproduct, consolidations or divestitures or for other reasons. In particular, certain of our customers have from time to time entered into manufacturingdivestiture transactions with other EMS companies, and such transactions could reduce our revenues with these customers. We cannot assure you that presentor future large customers will not terminate their manufacturing arrangements with us or significantly change, reduce or delay the amount of manufacturingservices ordered from us, any of which would reduce our net sales and net income.We are subject to intense competition in the EMS industry which could cause us to lose sales and therefore hurt our financial performance. The electronics manufacturing services (EMS) industry is highly competitive and the industry has experienced a surplus of manufacturing capacity.Our competitors include major global EMS providers such as Benchmark Electronics, Inc., Celestica, Inc., Flextronics International Ltd., Jabil Circuit, Inc.and Plexus Corp., as well as other EMS companies that have a regional, product, service or industry specific focus. Some of those companies have greatermanufacturing and financial resources than we do. We also face competition from current and potential OEM customers who may elect to manufacture theirown products internally rather than outsourcing to EMS providers.We may not be able to offer prices as low as some of our competitors because those competitors may have lower operating costs as a result of theirgeographic location, greater economies of scale or the services they provide or because these competitors are willing to provide EMS services at prices we areunable or unwilling to offer. There can be no assurance that17Table of Contentswe will not lose new or existing business in the future in response to such competitive pricing or other inducements which may be offered by our competitors,which would decrease our sales and net income. Our cash generated from operations is variable, which can adversely affect our ability to plan and invest in the business.Our ability to make capital expenditures, engage in strategic transactions, redeem debt and repurchase stock and the extent to which we need to utilizeour borrowing facilities depends in large part on our ability to generate cash flow from operations. Cash flow from operations is highly variable. For example,in 2011, 2012 and 2013, cash flow from operations was $235 million, $215 million and $318 million, respectively. Our cash generated by or used inoperations is impacted by a number of variables, including our growth and profitability, customer and supplier payment terms, timeliness of customerpayments to us and the extent to which we need to increase inventories in response to customer forecasts. To the extent our cash flow from operations fluctuatessignificantly in the future, our ability to make investments in our business, redeem debt and repurchase stock could be adversely impacted.Our strategy to pursue higher margin business depends in part on the success of our Components, Products and Services (CPS) business,which, if not successful, could cause our future gross margins and operating results to be lower. A key part of our strategy is to grow our CPS business, which includes printed circuit boards, backplane and cable assemblies, mechanicalsystems, memory, defense and aerospace and computing products and design, engineering, logistics and repair services. A decrease in orders for thesecomponents, products and services can have a disproportionately adverse impact on our profitability since these components, products and services generallycarry higher than average contribution margins. In addition, in order to grow this portion of our business profitability, we must continue to make substantialinvestments in the development of our product development capabilities, research and development activities, test and tooling equipment and skilled personnel,all of which reduce our operating results in the short term. The success of our CPS business also depends on our ability to increase sales of our proprietaryproducts, convince our customers to agree to purchase our components for use in the manufacture of their products and expand the number of our customerswho contract for our design, engineering, logistics and repair services. We may face challenges in achieving commercially viable yields and difficulties inmanufacturing components in the quantities and to the specifications and quality standards demanded by our customers, as well as in qualifying ourcomponents for use in our customers' designs. Our proprietary products and design, engineering, logistics and repair services must compete with productsand services offered by established vendors which focus solely on development of similar technologies or the provision of similar services. Any of thesefactors could cause our CPS revenue and margins to be less than expected, which would have an overall adverse and potentially disproportionate effect on ourrevenues and profitability.We may experience component shortages or price increases, which could cause us to delay shipments to customers and reduce our sales and netincome. We are dependent on certain suppliers, including limited and sole source suppliers, to provide key components we incorporate into our products. Wehave experienced, and may experience in the future, delays in delivery and shortages of components, which in turn could cause delays in product shipments tocustomers, result in reduced revenue from and have an adverse effect on our relationship with affected customers, and our reputation generally as a reliableservice provider. Component shortages can result in increased component prices which could decrease our gross profit. Component delays and shortages canalso result from natural disasters occurring in the regions in which our suppliers operate, such as the March 2011 earthquake and tsunami in Japan and thewidespread flooding in Thailand during late 2011. We may purchase components in advance of our requirements for such components as a result of athreatened or anticipated shortage. In this event, we may incur additional inventory carrying costs and have a heightened exposure to inventory obsolescencecosts, which may not be recoverable from our customers. Such costs would reduce our margins and net income. Finally, if key components become scarce,we may be required to look to second tier vendors or to procure components through brokers. Such components may be of lesser quality than those otherwiseavailable and could cause us to incur costs to qualify such components or to replace them if they prove to be defective.Our future gross margins and operating results may be adversely impacted by reduced demand for, or execution problems with, our integratedmanufacturing solutions business. The substantial majority of our revenues are derived from our integrated manufacturing solutions (IMS) business. We experience continued pressurefrom OEMs to reduce prices for these solutions and our competition remains intense. These factors can result in reduced IMS revenue, which would reduceour gross margins. Gross margins in our IMS business can also be negatively impacted by our product mix, with lower margins resulting from the provisionof less complex services, and by execution issues and operational inefficiencies at our plants. If we experience reduced demand or revenues from our IMS18Table of Contentsbusiness for any reason, or experience execution problems or operational inefficiencies, our gross margins and operating results in future periods may be lowerthan expected. Adverse changes in the key end markets we target could harm our business by reducing our sales.We provide products and services to companies that serve the communications networks, computing and storage, multimedia, industrial andsemiconductor capital equipment, defense and aerospace, medical, clean technology and automotive industries. Adverse changes in any of these markets couldreduce demand for our customers' products or make these customers more sensitive to the cost of our products and services, either of which could reduce oursales, gross margins and net income. A number of factors could affect any of these industries in general, or our customers in particular, and lead to reductionsin net sales, thus harming our business.These factors include: •intense competition among our customers and their competitors, leading to reductions in prices for their products and pricing pressures on us;•short product life cycles of our customers' products leading to continuing new requirements and specifications and product obsolescence, either ofwhich could cause us to lose business;•failure of our customers' products to gain widespread commercial acceptance which could decrease the volume of orders customers place with us;and•recessionary periods in our customers' markets which decrease orders from affected customers.We realize a substantial portion of our revenues from communications equipment customers. This market is highly competitive, particularly in thearea of price. Should any of our larger customers in this market fail to effectively compete with their competitors, they could reduce their orders to us orexperience liquidity difficulties, either of which would have the effect of reducing our revenue and net income, perhaps substantially. Revenue from ourmultimedia business, which is driven primarily by sales of set-top boxes, could decline as more content is delivered over the internet or through alternativemethods and not through set-top boxes, particularly in the U.S. or Europe. In addition, in the case of our defense business, United States budget actions couldcause a reduction or delay in orders placed by the government or defense contractors for products manufactured by SCI, our defense and aerospace division.Since such products carry higher margins than many of our other products and services, such a decrease would disproportionately reduce our gross marginand profitability. There can be no assurance that we will not experience declines in demand in these or other areas in the future.Our operating results are subject to significant uncertainties, which make predictability of our future sales and net income difficult. Our operating results are subject to significant uncertainties, including: •conditions in the economy as a whole and in the electronics industry;•fluctuations in components prices and component shortages caused by high demand, natural disaster or otherwise;•timing of new product development by our customers, which creates demand for our services, but which can also require us to incur start-upcosts relating to new tooling and processes;•levels of demand in the end markets served by our customers;•our ability to replace declining sales from end-of-life programs with new business wins;•timing of orders from customers and the accuracy of their forecasts;•inventory levels of customers, which if high relative to their normal sales volume, could cause them to reduce their orders to us;•timing of expenditures in anticipation of increased sales, customer product delivery requirements and shortages of components or labor;•increased labor costs in the regions in which we operate;•mix of products ordered by and shipped to major customers, as high volume and low complexity manufacturing services typically have lowergross margins than more complex and lower volume services;•degree to which we are able to utilize our available manufacturing capacity;19Table of Contents•our ability to maintain desired plant operating efficiencies, including achieving acceptable yields, effectively planning production and managingour inventory and fixed assets to avoid high carrying costs and excess working capital;•customer insolvencies resulting in bad debt or inventory exposures that are in excess of our reserves;•our ability to efficiently move manufacturing activities to lower cost regions without adversely affecting customer relationships while controllingcosts related to the closure of facilities and employee severance;•pricing and other competitive pressures;•fluctuations in the values of our assets, including real property and assets held for sale, which could result in charges to income;•volatility of foreign currency exchange rates;•changes in our tax provision due to changes in our estimates of pre-tax income in the jurisdictions in which we operate, including our ability toutilize our deferred tax assets; and•political and economic developments in countries in which we have operations which could restrict our operations or increase our costs. If any of these uncertainties should be realized, our financial results could be adversely impacted.A portion of our operating expenses is relatively fixed in nature and planned expenditures are based in part on anticipated orders, which are difficultto predict. If we do not receive anticipated orders as expected, our profitability will decline. Moreover, our ability to reduce our costs as a result of current orfuture restructuring efforts may be limited because consolidation of operations can be a costly and lengthy process to complete.Consolidation in the electronics industry may adversely affect our business by increasing customer buying power and increasing prices we pay forcomponents. Consolidation in the electronics industry among our customers, our suppliers and/or our competitors may increase as companies combine to achievefurther economies of scale and other synergies. Consolidation in the electronics industry could result in an increasing number of very large electronicscompanies offering products in multiple sectors of the electronics industry. The significant purchasing and market power of these large companies coulddecrease the prices paid to us by these customers. In addition, if one of our customers is acquired by another company that does not rely on us to provideEMS services either because it has its own production facilities or relies on another provider of similar services, we may lose that customer's business.Similarly, consolidation among our suppliers could result in a sole or limited source for certain components used in our customers' products. Any suchconsolidation could cause us to be required to pay increased prices for such components, which would reduce our gross margin and profitability.Unanticipated changes in our tax rates or exposure to additional income tax liabilities could increase our taxes and decrease our net income.We are subject to income, sales, value-added, withholding and other taxes in the United States and various foreign jurisdictions. Significantjudgment is required in determining our worldwide provision for taxes and, in the ordinary course of business, there are many transactions and calculationsfor which the ultimate tax determination is uncertain. Our effective tax rates and liability for other taxes could increase as a result of changes in the mix ofearnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, our cashmanagement strategies and other factors. For instance, pending Mexican legislation could significantly increase our taxes payable in Mexico in the future. Inaddition, our tax determinations are regularly subject to audit by tax authorities. For example, we are currently undergoing audits of our tax returns for certainrecent tax years in a number of jurisdictions, including the United States, Thailand, Hungary, Japan and Mexico. Developments in these or future auditscould adversely affect our tax provisions, including through the disallowance or reduction of deferred tax assets or the assessment of back taxes, interest andpenalties. Although we believe that our tax estimates are reasonable and our existing tax reserves are adequate, the final determination of tax audits or taxdisputes may be different from what is reflected in our historical tax provisions, which could lead to an increase in our taxes payable and a decrease in our netincome.Our business may experience seasonality, which could result in material changes in our operating results from quarter to quarter.Seasonality in our business has historically been driven by customer and product mix, particularly the end markets which our customers serve. Wehave observed that our revenue levels have typically been higher in the second half of20Table of Contentsour fiscal year and lower during the first half. However, there can be no assurance that this trend will continue and the extent to which our business remainsdepends upon our future customer base and the end markets that they serve, which we are unable to predict.We may be unable to generate sufficient liquidity to reduce our debt levels or maintain or expand our operations, which may reduce the businessour customers and vendors are able to do with us; we could experience losses if one or more financial institutions holding our funds were to fail.Our liquidity is dependent on profitability and business volume which affects working capital, including inventory requirements, the extension oftrade credit by our suppliers, the degree of alignment of payment terms from our suppliers with payment terms granted to our customers, investments infacilities and equipment, acquisitions, repayments and redemptions of our outstanding indebtedness and repurchases of our common stock. In order toimprove our liquidity, during the second quarter of 2012, we renewed and increased our asset-backed revolving credit facility increasing the facility to $300million, under which we could borrow $266.4 million, net of letters of credit and outstanding borrowings, as of September 28, 2013 and in the fourth quarterof 2012, we borrowed $40 million secured by our corporate headquarters. We also have $184 million in short-term financing facilities all of which remainedavailable to be borrowed as of September 28, 2013. Our asset-backed revolving credit facility expires in March 2017 and our foreign short-term facilitiesexpire at various dates through the second quarter of 2015.In the event we need additional capital, whether for working capital, debt repayment, stock repurchases, acquisitions or otherwise, there can be noassurance that such additional debt or equity capital will be available on acceptable terms or at all. In addition to our existing covenant requirements, futuredebt financing may require us to comply with financial ratios and covenants. New financing could require us to issue additional equity securities, whichcould cause dilution to existing stockholders. If additional or continued financing, including the continued extension of trade credit by our suppliers, is notavailable when required, our liquidity would be reduced. The risks of reduced liquidity include an inability to maintain or increase our rates of production, tomake necessary capital expenditures in order to maintain and expand our manufacturing capacity as needed, and to repay, reduce or refinance our debt. Any ofthese issues could cause our stock price to fall and reduce our customers' and vendors' willingness to do business with us.A principal source of our liquidity is our cash and cash equivalents, which are held with various financial institutions. Although we distribute suchfunds among a number of financial institutions that we believe to be of high quality, there can be no assurance that one or more of such institutions will notbecome insolvent in the future, in which case all or a portion of our uninsured funds on deposit with such institutions could be lost.Our credit arrangements contain covenants which may adversely impact our business and the failure to comply with such covenants could causeour outstanding debt to become immediately payable. Other than our $40 million loan secured by our corporate headquarters (the “Secured Debt due 2015”), our debt agreements do not contain financialcovenants currently applicable to us, but do include a number of restrictive covenants, including restrictions on incurring additional debt, makinginvestments and other restricted payments, selling assets, paying dividends and redeeming or repurchasing capital stock and debt, subject to certainexceptions. Our Secured Debt due 2015 requires us to maintain a minimum fixed charge coverage ratio during its term. Collectively, these covenants couldconstrain our ability to grow our business through acquisition or engage in other transactions, including refinancing our existing debt. In addition, suchagreements include covenants requiring, among other things, that we file quarterly and annual financial statements with the SEC, comply with all laws, payall taxes and maintain casualty insurance. If we are not able to comply with all of these covenants, for any reason, some or all of our outstanding debt as wellas all amounts payable under our interest rate swaps on such debt, if any, could become immediately due and payable and the incurrence of additional debtunder our asset-backed credit facility would not be allowed, any of which would have a material adverse effect on our liquidity and ability to conduct ourbusiness. Redemptions of debt and repurchases of common stock reduce our working capital and liquidity; debt refinancing can entail higher interestexpense, which would lower our net income; interest payments on variable rate debt can increase, which would lower our net income.During 2012 and 2013, we redeemed net $360 million and net $257.4 million of our long-term debt, respectively, and announced a $100 millionstock repurchase program. Although redemptions of debt and repurchases of stock improve our financial results, these actions also reduce our liquidity. If weshould redeem or repurchase additional debt or stock, our working capital and liquidity would be further reduced. In addition, should we undertake torefinance any of our outstanding long-term debt, there can be no assurance that the terms of such refinancing, particularly the interest rate, would be favorableto21Table of Contentsus. Should we be forced to replace lower interest rate debt with higher interest rate debt, our interest expense would increase and our net income would bereduced. An aggregate of $540 million of our long-term debt and all of our short-term borrowings bear interest at a variable rate based upon LIBOR, eitherunder the terms of such debt or as a result of interest rate swaps. Interest rates, including LIBOR, can change due to a variety of factors, includinggovernmental debt levels, ratings downgrade of U.S. or other sovereign debt, the pace of economic growth and central bank actions. Should LIBOR increasesubstantially in the future for any reason, interest payments on our variable interest rate debt would also increase. At the same time, the interest rate swapcounterparty for our Senior Notes due 2019 has the unilateral right, beginning in May 2014, to terminate such swap and pay us a market termination fee, inwhich case we would pay a 7% interest rate on such notes, which could be higher than the variable interest rate we currently pay through the swap. Anyincrease in the interest rates paid by us on our debt would increase our interest expense and lower our net income. We generally do not obtain long-term commitments from our customers; cancellations, reductions in production quantities, delays in productionby our customers and changes in customer requirements could reduce our sales and net income.We generally do not obtain firm, long-term purchase commitments from our customers and our bookings may generally be canceled prior to thescheduled shipment date. Customers may cancel their orders, reduce production quantities or delay production for a number of reasons, including significantdecreases in demand for their products and services and decisions to engage with other EMS providers. Although the customer is generally liable for finishedgoods and work-in-process at the time of cancellation, we may be unable or, for other business reasons, choose not to enforce our contractual rights.Cancellations, reductions or delays of orders by customers would:•reduce our sales and net income by decreasing the volumes of products that we manufacture for our customers;•delay or eliminate recovery of our expenditures for inventory purchased in preparation for customer orders; and•lower our asset utilization, which would result in lower gross margins and lower net income.In addition, customers sometimes require that we transfer the manufacturing of their products from one facility to another to achieve cost reductionsand other objectives. These transfers have resulted in increased costs to us due to facility downtime, less than optimal utilization of our manufacturingcapacity and delays and complications related to the transition of manufacturing programs to new locations. These transfers also have required us to close orreduce operations at certain facilities, particularly those in high cost locations such as the United States, Canada and Western Europe, and as a result we haveincurred, and may incur in the future, significant costs for the closure of facilities, employee severance and related matters. We may be required to relocateadditional manufacturing operations in the future and, accordingly, we may incur additional costs that decrease our net income. As a result of our components ordering policies and customer-requested ship dates, we may incur, and not be able to fully recover from ourcustomers, the purchase price or carrying costs of components, work-in-process and finished goods, which would decrease our margins and netincome. In order to satisfy customer orders, we are frequently required to order components and other parts in advance of customer payment, particularly forlong lead-time items. Furthermore, we may be required to keep additional components, work-in-process and finished goods in inventory in order to meetcustomer delivery dates. While our supply agreements with our customers generally allocate most of the liability for payment for such items to the customers,we may nonetheless incur additional carrying costs or not ultimately be compensated for these items should the customer default upon its obligations. To theextent we incur any such costs, our gross margins and net income would be reduced. If we manufacture or design defective products, or if our manufacturing processes do not comply with applicable statutory and regulatoryrequirements, we could be subject to claims, damages and fines and lose customers.We manufacture products to our customers' specifications, and in some cases our manufacturing processes and facilities need to comply withvarious statutory and regulatory requirements. For example, many of the medical products that we manufacture, as well as the facilities and manufacturingprocesses that we use to produce them must comply with standards established by the United States Food and Drug Administration. In addition, ourcustomers' products and the manufacturing processes that we use to produce them often are highly complex. As a result, products that we design ormanufacture may at times contain design or manufacturing defects, and our manufacturing processes may be subject to errors or may not be in compliancewith applicable statutory and regulatory requirements. Defects in the products we design or manufacture may result in product recalls, warranty claims bycustomers, including liability for repair costs, delayed shipments to customers or reduced or canceled customer orders. For example, a customer has assertedthat we are liable for certain costs relating to the loss of use of products manufactured by us. Although we believe this claim is unsubstantiated, the total costssought by the customer could22Table of Contentsbe significant. If these types of defects or deficiencies are significant, our results of operations and business reputation could be harmed. The failure of theproducts that we design or manufacture or of our manufacturing processes and facilities to comply with applicable statutory and regulatory requirements maysubject us to legal fines or penalties and, in some cases, require us to shut down or incur considerable expense to correct a manufacturing program or facility.In addition, these defects may result in product liability claims against us. The magnitude of such claims may increase as we expand our medical,automotive, and aerospace and defense manufacturing services because defects could result in death or significant injury to end users of these products. Evenif our customers are contractually responsible for defects in the design of a product, we could nonetheless be named in a product liability suit over suchdefects and could be required to expend significant resources to defend ourselves. We design products on a contract basis or jointly with our customers. The design services that we provide can expose us to different or greaterpotential liabilities than those we face when providing our regular manufacturing services. For example, we have increased exposure to potential productliability claims resulting from injuries caused by defects in products we design, as well as potential claims that products we design infringe third-partyintellectual property rights. Such claims could subject us to significant liability for damages and, regardless of their merits, could be time-consuming andexpensive to resolve. Any such costs and damages could be significant and would reduce our net income.Failure to comply with domestic or international employment and related laws could result in the payment of significant damages, which wouldreduce our net income. We are subject to a variety of domestic and foreign employment laws, including those related to safety, wages and overtime, discrimination, whistle-blowing, classification of employees and severance payments. Enforcement activity relating to these laws, particularly outside of the United States, canincrease as a result of increased media attention due to violations by other companies, changes in law, political and other factors. There can be no assurancethat we won't be found to have violated such laws in the future, due to a more aggressive enforcement posture by governmental authorities or for any otherreason. Any such violations could lead to the assessment of fines against us by federal, state or foreign regulatory authorities or damages payable to employees,which fines could be substantial and which would reduce our net income.Energy price increases may negatively impact our results of operations; regulatory actions could affect the price of energy, which could increaseour costs and reduce our profitability; natural resource shortages could impact our production.We, along with our suppliers and customers, rely on various energy sources in our manufacturing and transportation activities. There has beensignificant volatility in the prices of energy during the recent past and such volatility is likely to continue in the future. A sustained increase in energy pricescould cause an increase to our raw material, components and transportation costs. We may not be able to increase our product prices enough to offset theseincreased costs, in which case our profitability would be reduced.Concern over climate change has led to state, federal and international legislative and regulatory initiatives aimed at reducing carbon dioxide and othergreenhouse gas emissions. While we don't expect existing or currently proposed initiatives to directly impact our business operations in the near future, thesemeasures could over the long term lead to an increase in the cost of energy used in the manufacture of our products as a result of restrictions placed uponpower generators and distributors. We can't currently estimate the impact of any such indirect costs. However, should our operating costs in fact rise as aresult of any current, proposed or future greenhouse gas initiatives, and we are not able to pass such costs to our customers, our operating results would beadversely affected.Certain natural resources, including water used in our production processes, may become constrained, particularly in China, where economic outputmay outstrip natural resources. Such shortages could raise our costs or otherwise impact our production.We are subject to risks arising from our international operations. We conduct our international operations primarily in Asia, Latin America, Canada and Europe, and we continue to consider additional opportunitiesto make foreign acquisitions and establish new foreign facilities. The substantial majority of our net sales are generated through our non-U.S. operations and asignificant portion of our manufacturing material is provided by international suppliers. As a result of our international operations, we are affected byeconomic, political and other conditions in foreign countries, including: •the imposition of government controls;•compliance with United States and foreign laws concerning trade and employment practices;23Table of Contents•difficulties in obtaining or complying with export license requirements; •trade restrictions;•changes in tariffs;•labor unrest, including strikes, and difficulties in staffing;•security concerns;•regional military tension or hostilities;•inflexible employee contracts in the event of business downturns;•coordinating communications among and managing international operations;•fluctuations in currency exchange rates;•currency controls;•increases in duty and/or income tax rates;•adverse rulings in regards to tax audits;•excess costs associated with reducing employment or shutting down facilities;•misappropriation of intellectual property; and•constraints on our ability to maintain or increase prices. Our operations in certain foreign locations receive favorable income tax treatment in the form of tax holidays or other incentives. In the event that suchtax holidays or other incentives are not extended, are repealed, or we no longer qualify for such programs, our taxes may increase, which would reduce our netincome. Additionally, a significant portion of our worldwide cash reserves are generated by, and therefore held in, foreign jurisdictions. Some jurisdictionsrestrict the amount of cash that can be transferred to the United States or impose taxes and penalties on such transfers of cash. To the extent we have excesscash in foreign locations that could be used in, or is needed by, our United States operations, we may incur significant taxes to repatriate these funds. We operate in countries that have experienced labor unrest, political instability and strife, including Brazil, China, India, Israel, Malaysia andThailand and we have experienced work stoppages and similar disruptions in certain foreign jurisdictions. To the extent such developments prevent us fromadequately staffing our plants and manufacturing and shipping products in those jurisdictions, our margins and net income could be reduced and ourreputation as a reliable supplier could be negatively impacted.We have incurred substantial restructuring charges in the past and we may need to take material restructuring charges in the future. We have incurred significant expenses related to restructuring of our operations in the past and may continue to do so in the future. For example, wehave moved, and may continue to move, our operations from higher-cost to lower-cost locations to meet customer requirements. We have incurred in the past,and may incur in the future, costs related to workforce reductions, facility closures and subsequent environmental remediation, work stoppages and laborunrest resulting from the closure of facilities. In addition, we have incurred unanticipated costs related to the transfer of operations to lower-cost locations,including costs related to integrating new facilities, managing operations in dispersed locations and realigning our business processes. We also have incurredcosts to restructure operations that have been acquired in order to integrate them into our company. We expect to be required to record additional charges relatedto restructuring activities in the future, but cannot predict the timing or amount of such charges. Any such charges would reduce our net income. Our results may be adversely affected by rising labor costs. There is substantial uncertainty about future labor costs, in particular within the lower cost regions in which we operate. Demographic changes andeconomic development in these regions put upward pressure on wages in these regions. If we are required to make any substantial increase in wages in theseregions, our profitability could be reduced.Commodity price fluctuations may negatively impact our results of operations.Our components are manufactured using a number of commodities, including petroleum, gold, copper and other metals that are subject to frequentand unpredictable changes in price due to worldwide demand, investor interest and economic conditions. We do not hedge against the risk of thesefluctuations, but rather attempt to adjust our product pricing to reflect such24Table of Contentschanges. Should significant increases in commodities prices occur and should we not be able to increase our product prices enough to offset these increasedcosts, our gross margins and profitability would decrease, perhaps significantly.Our business could be adversely affected by any delays, or increased costs, resulting from the use of common carriers to transport our materialsand products.We rely on a variety of common carriers to transport our raw materials and components from our suppliers to us, and to transport our products toour customers. The use of common carriers is subject to a number of risks, including increased costs due to rising energy prices and labor, vehicle andinsurance costs, criminal activity, such as hijackings, resulting in losses of shipments, delivery delays resulting from labor disturbances and strikes andother factors beyond our control. While we attempt to mitigate our liability for any losses resulting from these risks through contracts with our customers,suppliers and insurance carriers, any costs or losses that cannot be mitigated could reduce our profitability, require us to manufacture replacement product ordamage our relationships with our customers. Our key personnel are critical to the continued growth of our business and we cannot assure you that they will remain with us. Our success depends upon the continued service of our key personnel, particularly our highly skilled operations managers and engineers involved inthe manufacture of existing products and development of new products and processes. Such employees may be heavily recruited by other companies,including our competitors. Generally, these employees are not bound by employment agreements and we rely on competitive pay packages in order to helpattract and retain such personnel. Should our key employees choose to terminate their employment with us in order to accept higher pay packages or otherwise,our operations and growth prospects could be negatively impacted.If we are unable to maintain our technological and manufacturing process expertise, our business could be adversely affected.Improvements to and refinements of our manufacturing processes are necessary to manufacture next generation products for our customers in a cost-efficient manner. As a result, we are continually evaluating the cost-effectiveness and feasibility of new manufacturing processes. In some cases, we will berequired to make capital expenditures and incur engineering expense in order to qualify and validate any such new process. Such expenses would reduce ournet income. In addition, any delay in the deployment of such new process, or problems commencing volume production using a new process could also reduceour competitiveness, decrease our margins and net income and harm our reputation with our customers.Our international sales are subject to laws relating to trade, export controls and foreign corrupt practices, the violation of which could adverselyaffect our operations. We are required to comply with all applicable domestic and foreign export control laws, including the International Traffic in Arms Regulations andthe Export Administration Regulations (“EAR”). Some items manufactured by us are controlled for export by the United States Department of Commerce'sBureau of Industry and Security under the EAR. In addition, we are subject to the Foreign Corrupt Practices Act and international counterparts relating tobribery of foreign governments and officials, such as the U.K. Bribery Act. Violation of any of these laws or regulations could result in significant sanctions,including large monetary penalties and suspension or debarment from participation in future business opportunities, which could reduce our future revenueand net income and damage our reputation as a reputable supplier. In addition, defense of any such claim would likely be time consuming and expensive toresolve and would divert management's time and attention. We are subject to a number of U.S. governmental procurement rules and regulations, the failure to comply with which could result in damages orreduction of future revenue. We are subject to a number of laws and regulations relating to the award, administration and performance of U.S. government contracts andsubcontracts. Such laws and regulations govern, among other things, price negotiations, cost accounting standards and other aspects of performance undergovernment contracts. These rules are complex and our performance under them is subject to audit by the Defense Contract Audit Agency and othergovernment regulators. If an audit or investigation reveals a failure to comply with regulations or other improper activities, we may be subject to civil orcriminal penalties and administrative sanctions by either the government or the prime customer, including termination of the contract, payment of fines andsuspension or debarment from doing further business with the U.S. government. Any of these actions would increase our expenses, reduce our revenue anddamage our reputation as a reliable government supplier. 25Table of ContentsWe can experience losses due to foreign exchange rate fluctuations, which would reduce our net income. Because we manufacture and sell a substantial portion of our products abroad, our operating costs are subject to fluctuations in foreign currencyexchange rates. If the U.S. dollar weakens against the foreign currencies in which we denominate certain of our trade accounts payable, fixed purchaseobligations and other expenses, the U.S. dollar equivalent of such expenses would increase. We use financial instruments, primarily short-term foreigncurrency forward contracts, to hedge certain forecasted foreign currency commitments arising from trade accounts receivable, trade accounts payable and fixedpurchase obligations. Our foreign currency hedging activities depend largely upon the accuracy of our forecasts of future sales, expenses, capital expendituresand monetary assets and liabilities. As such, our foreign currency forward contracts may exceed or not cover our full exposure to exchange rate fluctuations. Ifthese hedging activities are not successful, we may experience significant unexpected expenses from fluctuations in exchange rates, which could be significantand which would decrease our net income. Any failure to comply with applicable environmental laws could adversely affect our business by causing us to pay significant amounts forcleanup of hazardous materials or for damages or fines. We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, storage, dischargeand disposal of hazardous substances and wastes in the ordinary course of our manufacturing operations. If we violate environmental laws or if we occupy oroccupied in the past a site at which a predecessor company caused contamination, we may be held liable for damages and the costs of remedial actions. Wecannot assure you that we will not violate environmental laws and regulations in the future as a result of human error, equipment failure or other causes.Although we estimate and regularly reassess our potential liability with respect to violations or alleged violations and accrue for such liability, we cannot assureyou that our accruals will be sufficient. Any increase in existing reserves or establishment of new reserves for environmental liability would reduce our netincome. Our failure or inability to comply with applicable environmental laws and regulations could also limit our ability to expand facilities or could requireus to acquire costly equipment or to incur other significant expenses to comply with these laws and regulations. Asbestos containing materials, or ACM, are present at several of our manufacturing facilities. Although the ACM is being managed and controlshave been put in place pursuant to ACM operations and maintenance plans, the presence of ACM could give rise to remediation obligations and otherliabilities. Our plants generally operate under environmental permits issued by governmental authorities. For the most part, these permits must be renewedperiodically and are subject to revocation in the event of violations of environmental laws. Any such revocation could require us to cease or limit production atone or more of our facilities, thereby having an adverse impact on our results of operations.Primarily as a result of certain of our acquisitions, we have incurred liabilities associated with environmental contamination. These liabilities includeongoing investigation and remediation activities at a number of current and former sites, including ones located in Irvine, California; Owego, New York;Derry, New Hampshire; and Brockville, Ontario. There are some sites, including our acquired facility in Gunzenhausen, Germany, that are known to havegroundwater contamination caused by a third-party, and that third-party has provided indemnity to us for the liability. However, third party indemnities maynot be effective to reduce our liability for environmental contamination. For example, Nortel Networks, which had provided us an indemnity with respect toenvironmental investigation activities being undertaken at our former Brockville site, is party to bankruptcy proceedings that may cause it not to fully honorits indemnification obligations to us. As a result, we could be required to absorb the full expense of any remediation of that site.The time required to perform environmental remediations can be lengthy and there can be no assurance that the scope, and therefore cost, of theseactivities will not increase as a result of the discovery of new contamination or contamination on adjoining landowner's properties or the adoption of morestringent regulatory standards covering sites at which we are currently performing remediation activities. Although liabilities for historical treatment and disposal activities have not materially affected our financial condition to date, we cannot assure youthat past disposal activities will not result in liability that will materially affect us in the future, nor can we provide assurance that we do not haveenvironmental exposures of which we are unaware and which could adversely affect our future operating results. Over the years, environmental laws have become, and in the future may continue to become, more stringent, imposing greater compliance costs andincreasing risks and penalties associated with violations. We operate in several environmentally sensitive locations and are subject to potentially conflictingand changing regulatory agendas of political, business and26Table of Contentsenvironmental groups. Changes in or restrictions on discharge limits, emissions levels, permitting requirements and material storage or handling could requirea higher than anticipated level of remediation activities, operating expenses and capital investment or, depending on the severity of the impact of the foregoingfactors, costly plant relocation. In addition, the electronics industry became subject to the European Union's RoHS (Restriction of Hazardous Substances) and WEEE (Waste fromElectrical and Electronic Equipment) directives which took effect beginning in 2005. Parallel initiatives have been adopted in other jurisdictions, includingseveral states in the United States and the People's Republic of China. RoHS prohibits the use of lead, mercury and certain other specified substances inelectronics products and WEEE requires OEMs to assume responsibility for the collection, recycling and management of waste electronic products andcomponents. Although we believe we have implemented procedures to make our manufacturing process RoHS compliant, a successful assertion by agovernmental entity of non-compliance could result in significant costs and/or penalties. In the case of WEEE, the compliance responsibility rests primarilywith OEMs rather than with EMS companies. However, OEMs may turn to EMS companies for assistance in meeting their WEEE obligations, which couldincrease our costs.Cybersecurity breaches and other disruptions of our IT network and systems could interrupt our operations. We rely on information technology networks and systems, some of which are owned and operated by third parties, to process, transmit and storeelectronic information. In particular, we depend on our information technology infrastructure for a variety of functions, including worldwide financialreporting, inventory management, procurement, invoicing and email communications. Any of these systems may be susceptible to outages due to fire, floods,power loss, telecommunications failures, terrorist attacks and similar events. Despite the implementation of network security measures, our systems and thoseof third parties on which we rely may also be vulnerable to computer viruses, break-ins, malware and similar disruptions. Malware, if surreptitiouslyinstalled on our systems and not timely detected and removed, could collect and disclose sensitive information relating to our customers, employees or others,exposing us to legal liability and causing us to suffer reputational damage. If we or our vendors are unable to prevent such outages and breaches, ouroperations could be disrupted.Employee theft or fraud could result in loss.Certain of our employees have access to, or signature authority with respect to, bank accounts or other company assets, which exposes us to the riskof fraud or theft. In addition, certain employees have access to key IT infrastructure and to customer and other information that is commercially valuable.Should any employee, for any reason, compromise our IT systems, or misappropriate customer or other information, we could incur losses, including lossesrelating to claims by our customers against us, the willingness of customers to do business with us may be damaged and, in the case of our defense business,we could be debarred from future participation in government programs.We may not be successful in implementing and integrating strategic transactions or in divesting assets or businesses, which could harm ouroperating results. From time to time, we may undertake strategic transactions that give us the opportunity to access new customers and new end-customer markets, toobtain new manufacturing and service capabilities and technologies, to enter new geographic manufacturing locations, to lower our manufacturing costs andimprove our profits, and to further develop existing customer relationships. Strategic transactions involve a number of risks, uncertainties and costs,including the following: •integrating acquired operations and businesses including in regions or countries in which we have not previously operated;•incurring severance and other restructuring costs, which would reduce our net income;•obtaining regulatory approvals or other conditions to closing, which could delay the closing and increase the costs of strategic transactions;•diverting management attention from day-to-day duties in order to implement and integrate strategic transactions;•scaling up production and coordinating management of operations at new sites;•incurring transaction expenses, which could be significant;•separating operations or support infrastructure for entities divested;•managing and integrating operations in geographically dispersed locations;•maintaining customer, supplier or other favorable business relationships of acquired operations and terminating unfavorable relationships, whichcould be costly;•integrating the acquired company's systems into our management information systems;27Table of Contents•satisfying unforeseen liabilities of acquired businesses, including liability for past violations of law and environmental liabilities, which could bematerial and which could subject us to ongoing regulatory scrutiny or requirements;•operating in geographic markets or industry sectors in which we may have little or no experience;•complying with laws of new jurisdictions in which we have not previously operated;•improving and expanding our management information systems to accommodate expanded operations; and•losing key employees of acquired operations. Asset or business divestitures, even when part of our strategic plan, could reduce our revenue and net income.Any of these factors could prevent us from realizing the anticipated benefits of a strategic transaction, and our failure to realize these benefits couldreduce our sales below and increase our costs above our forecasts and could cause write-downs of the value of the business acquired which would decrease ournet income. Acquisitions may also be dilutive to our earnings per share, particularly if our projections and assumptions about the acquired business' futureoperating results prove to be inaccurate. As a result, although the goal of our acquisition and divestiture strategy is to improve our operating results andincrease stockholder value, there can be no assurance that any transactions that we complete will actually do so. If we are unable to protect our intellectual property or infringe, or are alleged to infringe, upon intellectual property of others, we could berequired to pay significant amounts in costs or damages. We rely on a combination of copyright, patent, trademark and trade secret laws and restrictions on disclosure to protect our intellectual propertyrights. We cannot be certain that the steps we have taken will prevent unauthorized use of our intellectual property. For example, we rely in part upon patents toprotect our intellectual property position. However, a number of our patents covering certain aspects of our manufacturing processes or products have expiredor will expire in the near future. Such expirations reduce our ability to assert claims against competitors or others who use or sell similar technology. Anyfailure to protect our intellectual property rights would diminish or eliminate the competitive advantages that we derive from our proprietary technology. We are also subject to the risk that current or former employees violate the terms of their proprietary information agreements with us. Should a keycurrent or former employee use or disclose any of our or our customers' proprietary information, we could become subject to legal action by our customers orothers, our key technologies could become compromised and our ability to compete could be adversely impacted.Finally, we may occasionally become involved in administrative proceedings, lawsuits or other proceedings if others allege that we infringe on theirintellectual property rights. Some of these claims could subject us to significant liability for damages and invalidate our property rights. If successful, suchclaims could impair our ability to collect royalties or license fees or could force us or our customers to: •stop producing products that use the challenged intellectual property;•obtain from the owner of the infringed intellectual property, at our expense, a license to sell the relevant technology at an additional cost, whichlicense may not be available on reasonable terms, or at all; or•redesign those products or services so as not to use the infringed technology.We sometimes design products on a contract basis or jointly with our customers. In these situations, we may indemnify our customer againstliability caused by claims that the design infringes the intellectual property rights of a third party. Such indemnification claims could require us to assume thedefense of such a claim, the cost of which could be significant. Any of these results could reduce our revenue, increase our costs and reduce our net income and could damage our reputation with our customers. Inaddition, any type of intellectual property lawsuit, whether initiated by us or a third party, would likely be time consuming and expensive to resolve andwould divert management's time and attention.We may not have sufficient insurance coverage for potential claims and losses, which could leave us responsible for certain costs and damages. We carry various forms of business and liability insurance in types and amounts we believe are reasonable and customary for similarly situatedcompanies in our industry. However, we do not have insurance coverage for all of the risks and28Table of Contentsliabilities we assume in connection with our business and the products and services we provide to our customers, including failure to comply with typicalcustomer warranties for workmanship, product liability, intellectual property infringement and product recall claims. In addition, our policies generally havedeductibles that would reduce the amount of our potential recoveries from insurance. As a result, not all of our potential business losses are covered under ourinsurance policies. Should we sustain a significant uncovered loss, our net income would be reduced.Provisions of the Dodd-Frank Act relating to “Conflict Minerals” may increase our costs and lead to reputational challenges.The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning thesupply of certain minerals originating from the Democratic Republic of Congo (DRC) and adjoining countries that are believed to be benefiting armed groups.As a result, the SEC has adopted due diligence, disclosure and reporting requirements for companies which manufacture products that include componentscontaining such minerals, regardless of whether the minerals are actually mined in the DRC or adjoining countries. Our first report under these rules will bedue by May 31, 2014.Such regulations could decrease the availability and increase the prices of components used in our customers' products, particularly if we choose (orare required by our customers) to source such components from different suppliers than we use now. In addition, as our supply chain is complex and themethod of complying with these SEC rules is unclear, we expect that the compliance process will be both time-consuming and costly. We may face reputationalchallenges with our customers and other stakeholders if we are unable to timely verify the origins of minerals contained in the components included in ourcustomers' products, or if our due diligence process reveals that materials we source originate in the DRC or adjoining countries and benefit armed groups. Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results ofoperations; additionally, changes in securities laws and regulations have increased, and are likely to continue to increase, our operating costs. We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, or U.S. GAAP.Our preparation of financial statements in accordance with U.S. GAAP requires that we make estimates and assumptions that affect the recorded amounts ofassets and liabilities, disclosure of those assets and liabilities as of the date of the financial statements and the recorded amounts of expenses during thereporting period. A change in the facts and circumstances surrounding those estimates could result in a change to our estimates and could impact our futureoperating results. In addition, these principles are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC and various bodies formedto interpret and create accounting policies. A change in those policies can have a significant effect on our reported results and may affect our reporting oftransactions which are completed before a change is announced. Accounting policies affecting many other aspects of our business, including rules relating torevenue recognition, off-balance sheet transactions, stock-based compensation, restructuring, acquisition accounting, asset disposals and asset retirementobligations, leases, intangible assets, derivative and other financial instruments and in-process research and development charges, have recently been revisedor are under review. Changes to those rules or the questioning of how we interpret or implement those rules may have a material adverse effect on our reportedfinancial results or on the way we conduct business. In addition, the anticipated convergence of U.S. GAAP and international financial accounting standardscreates uncertainty as to the financial accounting policies and practices we will need to adopt in the future.Finally, corporate governance, public disclosure and compliance practices continue to evolve based upon continuing legislative action, SECrulemaking and stockholder advisory group policies. As a result, the number of rules and regulations applicable to us may increase, which would alsoincrease our legal and financial compliance costs and the amount of time management must devote to compliance activities. Increasing regulatory burdenscould also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee, andqualified executive officers in light of an increase in actual or perceived workload and liability for serving in such positions. The market price of our common stock is volatile.The stock market in recent years has experienced significant price and volume fluctuations that have affected the market prices of companies,including companies in the EMS business. These fluctuations have often been unrelated to the operating performance of these companies. The market for ourcommon stock has been and may in the future be subject to similar volatility. Factors such as fluctuations in our operating results, announcements by ourcompetitors or other events29Table of Contentsaffecting companies in the electronics industry, currency fluctuations, general market fluctuations and macro economic conditions may cause the market priceof our common stock to decline.We are subject to risks associated with natural disasters and global events. We conduct a significant portion of our activities including manufacturing, administration and information technology management in areas thathave experienced natural disasters, such as major earthquakes, hurricanes, floods and tsunamis. For example, in March 2011, Japan experienced a majorearthquake and tsunami and in late 2011, widespread flooding occurred in Thailand. Our insurance coverage with respect to damages to our facilities or ourcustomers' products caused by natural disasters is limited and is subject to deductibles and coverage limits and, as a result, may not be sufficient to cover allof our losses. For example, our policies do not cover damage due to earthquake. In addition, such coverage may not continue to be available at commerciallyreasonable rates and terms. In the event of a major earthquake or other disaster affecting one or more of our facilities, our operations and managementinformation systems, which control our worldwide procurement, inventory management, shipping and billing activities, could be significantlydisrupted. Such events could delay or prevent product manufacturing and shipment for the time required to transfer production or repair, rebuild or replace theaffected manufacturing facilities. While we have disaster recovery plans in place, there can be no assurance that such plans will be sufficient to allow ouroperations to continue in the event of every natural or man-made disaster, pandemic or other extraordinary event. Any extended inability to continue ouroperations at unaffected facilities following such an event would reduce our revenue and potentially damage our reputation as a reliable supplier.Item 1B. Unresolved Staff Comments None.30Table of ContentsItem 2. Properties Facilities. Our customers market numerous products throughout the world and therefore need to access manufacturing services on a global basis. Toenhance our integrated manufacturing solutions offerings, we seek to locate our facilities either near our customers and our customers' end markets in majorcenters for the electronics industry or, when appropriate, in lower cost locations. Many of our plants located near customers and their end markets are focusedprimarily on new product introduction and final system assembly and test, while plants located in lower cost areas are engaged primarily in higher volume,less complex component and subsystem manufacturing and assembly. We continue to evaluate our global manufacturing operations and restructure our facilities and operations to bring our manufacturing capacity in linewith demand and our manufacturing strategy and to provide cost efficient services to our customers. Through this process, we have closed certain facilitiesnot required to satisfy current demand levels. We provide extensive operations in lower cost locations including Latin America, Eastern Europe, China, Indiaand Southeast Asia and we plan to expand our presence in these lower cost locations as appropriate to meet the needs of our customers. As of September 28, 2013, the approximate square footage of our active manufacturing facilities by country was as follows: ApproximateSquare FootageArgentina1,335Australia7,105Brazil277,206Canada190,837China3,029,134Columbia2,772Czech Republic70,870Finland223,060Germany363,778Hong Kong29,682Hungary592,388India379,115Indonesia99,210Ireland110,000Israel136,292Malaysia264,054Mexico2,034,044Singapore472,935South Africa3,670Sweden77,425Thailand326,293United Kingdom41,174United States2,980,325Total11,712,704 As of September 28, 2013, our active manufacturing facilities consist of 8,409,805 square feet in facilities that we own, with the remaining3,302,899 square feet in leased facilities under lease terms expiring between 2014 and 2042.In addition to the above, we have 173,333 square feet of non-manufacturing space that we are currently using and 1,497,273 square feet of space ininactive facilities, of which 424,585 square feet is in domestic locations and 1,072,688 square feet is in international locations. Additionally, 205,412 squarefeet of space in our inactive facilities is leased to third parties. We are currently undertaking an aggressive program to sublease or terminate leases for unusedfacilities and to sell owned properties that are no longer expected to serve our future needs. These properties are being marketed for sale at an aggregate31Table of Contentslist price of over $80 million. We regularly evaluate our expected future facilities requirements. We believe our existing facilities are adequate to meet ourrequirements for the next 12 months. Certifications and Registrations. Certifications and registrations under industry standards are important to our business because many customersrely on them to confirm our adherence to manufacturing process and quality standards. Certain markets, such as telecommunications, medical, aviation,defense, aerospace and automotive, require adherence to industry-specific standards. Substantially all of our manufacturing facilities are registered underISO 9001:2008, a standard published by the International Organization for Standardization. As part of the ISO 9001:2008 certification process, we have ahighly developed quality management system and continually improve its effectiveness in accordance with its requirements. We use this registration todemonstrate our ability to consistently provide product that meets customer and applicable regulatory requirements and enhance customer satisfaction throughits effective application. ISO 9001:2008 registration is of particular importance to our customers throughout the world. In addition to ISO 9001:2008, most of our facilities are TL 9000 registered. The TL 9000 quality system requirements and quality system metricsare designed specifically for the telecommunications industry to promote consistency and efficiency, reduce redundancy and improve customer satisfaction.Included in the TL 9000 system are performance-based metrics that quantify reliability and quality performance of the product. The majority of our facilitiesare also compliant with the standards set by Underwriters Laboratories (UL). These standards define requirements for quality, manufacturing process controland manufacturing documentation and are required by many OEMs in the communications sector of the electronics industry. Our medical systems division has identified certain manufacturing facilities to be centers of excellence for medical products manufacturing. Thesefacilities are FDA and ISO 13485:2003 certified and, where appropriate, FDA registered. All facilities are fully compliant with the FDA's quality systemsregulations. Our defense and aerospace operations are headquartered in Huntsville, Alabama and are housed in a facility dedicated to meeting the specializedneeds of our defense and aerospace customers. This defense and aerospace operation is AS9100 registered and is also certified under various U.S. militaryspecifications as well as under ANSI and other standards appropriate for defense and aerospace suppliers. Other selected operations around the world are alsoAS9100 registered. Our automotive facilities are strategically located worldwide. Substantially all of our automotive facilities are certified to ISO/TS 16949:2009, theautomotive industry standard.Item 3. Legal Proceedings Two of our subsidiaries, Sanmina-SCI do Brasil Technology Ltda. and Sanmina do Brasil Integration Ltda., are parties to six separateadministrative and judicial proceedings in the Brazilian Chamber of Appeals of Administrative Court, the Chamber of the Administrative Court of São Paulo,Brazil and the Lower Federal Court in Campinas, São Paulo State. The cases were brought against the subsidiaries at various times between November 2006and May 2013 by the Federal Revenue Secretariat of Brazil and State Treasury of São Paulo. The claims allege that these subsidiaries failed to comply withcertain bookkeeping and tax rules for certain periods between 2001 and 2010. The claims seek payment by the subsidiaries of state value-added tax andincome and excise taxes allegedly owed by the subsidiaries, as well as fines. In addition, in February 2008, the subsidiaries filed a claim against the ChiefOffice of Brazilian Internal Revenue Service seeking recovery of certain income taxes and social fund contributions which it believes it overpaid in 1999 and2000. The administrative agencies and the court reached decisions in these cases against the subsidiaries between March 2007 and October 2012, all of whichwere appealed between April 2007 and November 2012. The administrative agencies and court have not ruled on any of the subsidiaries’ latest appeals. Inaddition, the subsidiaries’ claim against the Brazilian Internal Revenue Service has been denied and is on appeal. The subsidiaries believe they havemeritorious positions in these matters and intend to continue to contest the claims against them, although there can be no assurance that these claims will nothave a material adverse effect on our results of operations in the future.On June 23, 2008, the Orange County Water District filed suit against Sanmina Corporation and 17 other defendants in California Superior Courtfor Orange County alleging that the defendants' actions had polluted groundwater managed by the plaintiff. The complaint sought recovery of compensatoryand other damages, as well as declaratory relief, for the payment of costs necessary to investigate, monitor, remediate, abate and contain contamination ofgroundwater within the plaintiff's control. We have disputed the plaintiff's claims and asserted various defenses. On April 9, 2013, the Superior Court ruledin favor of our motion for summary adjudication dismissing us from the suit. In late August, 2013, the plaintiff appealed the Superior Court’s judgment. Weanticipate that the Court of Appeal will hear the appeal by the middle of calendar 2014.32Table of ContentsOn September 7, 2011, one of our Canadian subsidiaries became party to an order from the Ontario Ministry of Environment (the “MOE”) requiringsuch subsidiary to remediate certain environmental contamination at a site owned and operated by the subsidiary between 1999 and 2006. Remediationactivities had been performed at such site from 1990 to 2011 by the site's former owner which, along with the site’s current owner, are also parties to andbound by the order. On or about July 31, 2013, our subsidiary submitted a conceptual remedial action plan to the MOE with respect to the site outliningproposed investigation and remediation activities. On September 10, 2013, the MOE responded, indicating that it concurred with the conceptual remedialaction plan, but requesting some additional information. Although we believe the conceptual remediation action plan is reasonable, there can be no assurancethat the plan will not be required to be modified in the future, which could increase the costs of remediation, perhaps significantly.From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation, that arise in the normalcourse of our business. The ultimate outcome of any litigation is uncertain and unfavorable outcomes could have a negative impact on our results of operationsand financial condition. Regardless of outcome, litigation can have an adverse impact on us as a result of incurrence of defense costs, diversion ofmanagement resources and other factors. We record liabilities for legal proceedings when a loss becomes probable and the amount of loss can be reasonablyestimated.See also Note 8 of Notes to Consolidated Financial Statements. Item 4. Mine Safety Disclosures.Not applicable.33Table of ContentsPART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol SANM. The following table lists the high and low intra-dayprices for our common stock as reported on NASDAQ.2013 High LowFirst quarter $11.13 $7.58Second quarter $12.14 $9.12Third quarter $14.60 $10.18Fourth quarter $18.44 $14.292012 High LowFirst quarter $9.64 $6.01Second quarter $12.55 $9.28Third quarter $11.70 $6.62Fourth quarter $9.59 $7.02 As of November 12, 2013, we had approximately 1,152 holders of record of our common stock. On November 12, 2013, the last reported salesprice of our common stock on the Nasdaq Global Select Market was $15.43 per share.The following graph compares the cumulative 5-year total return provided shareholders on our common stock relative to the cumulative total returnsof the S&P 500 index and the NASDAQ Electronic Components index. An investment of $100 (with reinvestment of all dividends) is assumed to have beenmade in our common stock on September 27, 2008 and in each of the indexes on September 30, 2013 and its relative performance is tracked throughSeptember 28, 2013. 34Table of Contents * $100 invested on 9/27/2008 in stock or 9/30/08 in index, including reinvestment of dividends. Indexes calculated on month end basisCopyright @ 2013 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. 9/27/2008 10/3/2009 10/2/2010 10/1/2011 9/29/2012 9/28/2013Sanmina Corporation 100.00 83.13 122.05 67.89 86.48 178.25S&P 500 100.00 93.09 102.55 103.72 135.05 161.17NASDAQ Electronic Components 100.00 109.94 117.24 114.40 122.35 152.26The stock price performance included in this graph is not necessarily indicative of future stock price performance. Dividends We have never declared or paid cash dividends on our common stock. We currently expect to retain future earnings for use in the operation andexpansion of our business and do not anticipate paying cash dividends in the foreseeable future. Additionally, our ability to pay dividends is limited pursuantto covenants contained in our various debt agreements. See also “Item 7-Management's Discussion and Analysis of Financial Condition and Results ofOperations-Liquidity and Capital Resources.” 35Table of ContentsItem 6. Selected Financial DataThe following selected financial data should be read in conjunction with “Item 7-Management's Discussion and Analysis of Financial Condition andResults of Operations” and “Item 8-Financial Statements and Supplementary Data,” included elsewhere in this Form 10-K. FIVE YEAR SELECTED FINANCIAL HIGHLIGHTS Consolidated Statements of Operations Data: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 October 2, 2010 October 3, 2009 (In thousands, except per share data)Net sales$5,917,124 $6,093,334 $6,602,411 $6,318,691 $5,177,481Operating income (loss)$157,629 $137,490 $211,997 $204,799 $(4,656)Income (loss) from continuing operations before incometaxes$103,406 $49,943 $99,538 $139,242 $(112,570)Provision for (benefit from) income taxes (1)24,055 (130,291) 30,621 16,807 25,252Net income (loss)$79,351 $180,234 $68,917 $122,435 $(137,822)Net income (loss) per share: Basic$0.96 $2.22 $0.86 $1.55 $(1.67)Diluted$0.93 $2.16 $0.83 $1.48 $(1.67)Shares used in computing per share amounts: Basic82,834 81,284 80,345 79,195 82,528Diluted85,403 83,495 83,158 82,477 82,528 (1) In 2012 and 2013, the Company concluded that it was more likely than not that it would be able to realize the benefit of a portion of its deferred tax assetsin the future. As a result, the Company released $158.7 million and $21.5 million of the valuation allowance attributable to certain U.S. and foreign deferredtax assets and net operating losses in 2012 and 2013, respectively.Consolidated Balance Sheet Data: As of September 28, 2013 September 29, 2012 October 1, 2011 October 2, 2010 October 3, 2009 (In thousands)Cash and cash equivalents$402,875 $409,618 $640,288 $592,812 $899,151Net working capital$997,864 $1,106,752 $1,363,361 $1,338,666 $1,280,136Total assets$2,995,848 $3,167,786 $3,353,973 $3,301,796 $3,123,897Long-term debt (excluding current portion)$562,512 $837,364 $1,182,308 $1,240,666 $1,262,014Stockholders' equity$1,091,564 $963,781 $770,517 $661,601 $519,07036Table of ContentsItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of theSecurities Exchange Act of 1934. These statements relate to our expectations for future events and time periods. All statements other than statements ofhistorical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue orresults of operations, gross margin, operating margin, expenses, earnings or losses from operations, cash flow, synergies or other financial items;any statements of the plans, strategies and objectives of management for future operations; any statements concerning developments, performance orindustry ranking; any statements regarding future economic conditions or performance; any statements regarding pending legal proceedings andenvironmental remediations; any statements regarding the financial impact of customer bankruptcies; any statements regarding our expectations forfuture interest expense; any statements regarding the timing of closing of future cash outlays for and benefits of acquisitions; any statements aboutfuture redemptions or repurchases of debt and stock; any statements concerning the adequacy of our current liquidity and the availability of additionalsources of liquidity; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words“anticipate,” “believe,” “plan,” “expect,” “future,” “intend,” “may,” “will,” “should,” “estimate,” “predict,” “potential,” “continue” andsimilar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts andassumptions and are subject to the risks and uncertainties contained in Part I, Item 1A of this report. As a result, actual results could vary materiallyfrom those suggested by the forward looking statements. We undertake no obligation to publicly disclose any revisions to these forward-lookingstatements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission. Overview We are a leading independent global provider of integrated manufacturing solutions, components, products and repair, logistics and after-marketservices. Our revenue is generated from sales of our services primarily to original equipment manufacturers (OEMs) in the following industries:communications networks; computing and storage; multimedia; industrial and semiconductor capital equipment; defense and aerospace; medical; cleantechnology and automotive.Our operations are managed as two businesses:1) Integrated Manufacturing Solutions (IMS). IMS is a reportable segment consisting of printed circuit board assembly and test, final systemassembly and test, and direct-order-fulfillment.2) Components, Products and Services (CPS). Components include interconnect systems (printed circuit board fabrication, backplane and cableassemblies) and mechanical systems (enclosures, precision machining and plastic injection molding); Products include memory and solidstate drive products from Viking Technology, defense and aerospace products from SCI Technology, storage products from Newisys andoptical and RF (Radio Frequency) modules; and Services include design, engineering, logistics and repair services.In accordance with the accounting rules for segment reporting, our only reportable segment is IMS, which represented 80% of our total revenue in2013. Our CPS business consists of multiple operating segments which do not meet the quantitative thresholds for being presented as reportable segments.Therefore, financial information for these operating segments is presented in a single category entitled “Components, Products and Services”. Effective in thefourth quarter of 2013, the Optical and RF modules group was moved to CPS (previously included in IMS). The Optical and RF modules group offerscustomers engineering solutions and product designs, including joint product design services with customers. As a result, this group creates intellectualproperty that can be used in proprietary designs and products similar to the other product businesses in CPS.All references in this section to years refer to our fiscal years ending on the last Saturday of each year closest to September 30th. Fiscal 2013, 2012and 2011 are each 52 weeks.Our strategy is to leverage our comprehensive service offering, advanced technologies, and global capabilities to further penetrate diverse end marketsthat we believe offer significant growth opportunities and have complex products that require higher value-added services. We believe this strategy differentiatesus from our competitors and will drive more sustainable revenue growth and provide opportunities for us to ultimately achieve operating margins that exceedindustry standards.There are many challenges to successfully executing our strategy. For example, we compete with a number of companies in each of our key endmarkets. These include companies that are much larger than we are and smaller companies37Table of Contentsthat focus on a particular niche. Although we believe we are well-positioned in each of our key end markets and seek to differentiate ourselves from ourcompetitors, competition remains intense and profitably growing our revenues has been challenging as evidenced by declining revenues in each of the last twoyears. Additionally, further growing and leveraging our CPS business to improve our operating margins continues to be an integral part of our strategy.Although our CPS revenue grew 5% in 2013 and gross margins improved by 200 basis points, we believe this business is capable of delivering much betterresults. We continue to address these challenges on both a short-term and long-term basis. In late 2008, the business environment became challenging due to adverse global economic conditions. These conditions slowed global economicgrowth and resulted in recessions in many locations, including the U.S., Europe and certain countries in Asia. These conditions materially and adverselyimpacted our financial condition and results of operations for 2009. Global economic conditions improved throughout 2010, contributing to a substantialincrease in our business volume. As a result of this increase in business volume and the realization of benefits from our previous restructuring actions, our netsales and gross profit increased significantly during 2010 and we had our first profitable year since 2001. We continued to be profitable in 2011, 2012 and2013 despite an inconsistent economic environment due to high levels of unemployment, concerns about debt levels and possible recessions in certaincountries, and other factors. These conditions have resulted in reduced demand for many of our customers' products, causing these customers to reduce orreschedule their orders with us. We have experienced fluctuations in our results of operations in the past and may continue to experience such fluctuations inthe future. During 2012 and 2013, we reduced our net debt obligations by $655 million, which has resulted in significant interest expense savings. Forexample, interest expense for 2013 was $41.0 million, compared to $71.7 million for 2012 and $99.1 million for 2011. Despite the significant cash outlayrequired to reduce our debt, our total sources of liquidity at the end of 2013 were $853 million, which is an increase of $47 million over this same two-yeartime period. This increase is primarily attributable to cash generated from operations of over $500 million and increased capacity from short-term borrowingfacilities of $284 million. In addition to our current sources of liquidity, we believe we have sufficient access to additional sources of capital should the needarise.A relatively small number of customers have historically generated a significant portion of our net sales. Sales to our ten largest customersrepresented approximately 50% of our net sales in 2013, 2012 and 2011. A single customer represented 10% or more of our net sales in each of 2013 and 2012.A different customer represented 10% or more of our net sales in 2011.We typically generate a significant portion of our net sales from products manufactured in our foreign operations. Net sales generated from foreignoperations were approximately 80% of our total net sales in 2013, 2012 and 2011. The concentration of foreign operations has resulted primarily from a desireon the part of many of our customers to require production in lower cost locations in regions such as Asia, Latin America and Eastern Europe. We expect thisconcentration to continue. Historically, we have had substantial recurring sales to existing customers. We typically enter into supply agreements with our major OEMcustomers. These agreements generally have terms ranging from three to five years and cover the manufacture of a range of products. Under these agreements,a customer typically agrees to purchase its requirements for specific products in particular geographic areas from us. These agreements generally do notobligate the customer to purchase minimum quantities of products and in some circumstances provide for cost reduction objectives during the term of theagreement, which can have the effect of reducing revenue and profitability from such arrangements. 38Table of ContentsCritical Accounting Policies and Estimates Management's discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statementswhich have been prepared in accordance with accounting principles generally accepted in the United States. We review the accounting policies used in reportingour financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reportedamounts of assets, liabilities, net sales and expenses and related disclosure of contingent liabilities. On an ongoing basis, we evaluate the process used todevelop estimates for certain reserves and contingent liabilities, including those related to product returns, accounts receivable, inventories, income taxes,warranty obligations, environmental matters, restructuring, contingencies and litigation. We base our estimates on historical experience and various otherassumptions that we believe are reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from othersources. Our actual results may differ materially from these estimates. We believe the following critical accounting policies reflect the more significant judgments and estimates used by us in preparing our consolidatedfinancial statements:Accounts Receivable and Other Related Allowances— We estimate uncollectible accounts, product returns and other adjustments related to currentperiod net sales to establish valuation allowances. In making these estimates, we analyze the creditworthiness of our customers, past experience, specific factsand circumstances, and the overall economic climate in the industries we serve. If actual uncollectible accounts, product returns or other adjustments differsignificantly from our estimates, the amount of sales or operating expenses we report would be affected. One of our most significant credit risks is the ultimaterealization of our accounts receivable. This risk is mitigated by (i) a significant portion of sales to financially sound companies, (ii) ongoing credit evaluationof our customers, (iii) frequent contact with our customers, especially our most significant customers, which enables us to monitor changes in their businessoperations and to respond accordingly and (iv) obtaining, in certain cases, a guaranty from a customer's parent entity. To establish our allowance for doubtfulaccounts, we evaluate credit risk related to specific customers based on their financial condition and the current economic environment; however, we are notable to predict the inability of our customers to meet their financial obligations to us. We believe the allowances we have established are adequate under thecircumstances; however, a change in the economic environment or a customer's financial condition could cause our estimates of allowances, and consequentlythe provision for doubtful accounts, to change, which could have a significant adverse impact on our financial position and/or results of operations. Ourallowance for product returns and other adjustments is primarily established using historical data. Inventories— We state inventories at the lower of cost (first-in, first-out method) or market value. Cost includes raw materials, labor andmanufacturing overhead. We regularly evaluate the carrying value of our inventories and make provisions to reduce excess and obsolete inventories to theirestimated net realizable values. The ultimate realization of inventory carrying amounts is affected by changes in customer demand for inventory that customersare not contractually obligated to purchase and inventory held for specific customers who are experiencing financial difficulties. Inventory write-downs arerecorded based on forecasted demand, past experience with specific customers, the ability to redistribute inventory to other programs or back to our suppliers,and whether customers are contractually obligated and have the ability to pay for the related inventory. Certain payments received from customers forinventories that have not been shipped to customers or otherwise disposed of are netted against inventory. We procure inventory based on specific customer orders and forecasts. Customers have limited rights of modification (for example, cancellations)with respect to these orders. Customer modifications of orders affecting inventory previously procured by us and our purchases of inventory beyond customerneeds may result in excess and obsolete inventory. Although we may be able to use some excess inventory for other products we manufacture, a portion of thecost of this excess inventory may not be returned to the vendors or recovered from customers. Write-offs or write-downs of inventory could relate to:•changes in customer demand for inventory, such as cancellation of orders, and our purchases of inventory beyond customer needs that result inexcess quantities on hand that we are not able to return to the vendor, use to fulfill orders from other customers or charge back to the customer;•inventory held for specific customers who are experiencing financial difficulties; and•declines in the market value of inventory.Our practice is to dispose of excess and obsolete inventory as soon as practicable after such inventory has been identified as having no value to us. Property, Plant and Equipment—We review property, plant and equipment for impairment whenever events or changes in circumstances indicatethat the carrying amount of an asset or asset group may not be recoverable. An asset or asset39Table of Contentsgroup is considered impaired if its carrying amount exceeds the undiscounted future net cash flows the asset or asset group is expected to generate. If an assetor asset group is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset groupexceeds its fair value. An asset group is the unit of accounting which represents the lowest level for which identifiable cash flows are largely independent of thecash flows of other groups of assets. For vertically integrated plants, each individual plant, together with the other plants with which it is vertically integrated,is an asset group. For all other plants, each individual plant is an asset group. For asset groups for which a building is the primary asset, we estimate fairvalue primarily based on data provided by commercial real estate brokers. For other assets, we estimate fair value based on projected discounted future netcash flows. Management applies significant judgment in estimating future cash flows. Income Taxes— We estimate our income tax provision or benefit in each of the jurisdictions in which we operate, including estimating exposuresrelated to examinations by taxing authorities. We believe our accruals for tax liabilities are adequate for all open years based on our assessment of many factorsincluding past experience and interpretations of tax law applied to the facts of each matter. Although we believe our accruals for tax liabilities are adequate, taxregulations are subject to interpretation and the tax controversy process is inherently lengthy and uncertain; therefore, our assessments can involve a series ofcomplex judgments about future events and rely heavily on estimates and assumptions. To the extent the probable tax outcome of these matters changes, suchchanges in estimates will impact our income tax provision in the period in which such determination is made. We only recognize or continue to recognize taxpositions that meet a “more likely than not” threshold of being upheld. Interest and penalties related to unrecognized tax benefits are recognized as a componentof income tax expense. We must also make judgments regarding the realizability of deferred tax assets. The carrying value of our net deferred tax assets is based on ourbelief that it is more likely than not that we will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. We evaluatepositive and negative evidence each reporting period when assessing the need for a valuation allowance. A valuation allowance is established for deferred taxassets when we believe realization of such assets is not more likely than not. Our judgments regarding future taxable income may change due to changes inmarket conditions, new or modified tax laws, tax planning strategies or other factors. If our assumptions, and consequently our estimates, change in thefuture, the valuation allowances we have established may be increased or decreased, resulting in a respective increase or decrease in income tax expense. As aresult of our analysis of the positive and negative evidence available at the end of 2013 and 2012, we released $21.5 million and $158.7 million, respectively,of our valuation allowance against certain of our U.S. and foreign deferred tax assets and net operating losses. We will continue to evaluate all evidence infuture periods to determine if further release of the valuation allowance is warranted.Our effective tax rate is highly dependent upon the amount and geographic distribution of our worldwide income or losses, the tax regulations, ratesand holidays in each geographic region, the utilization of net operating losses, the availability of tax credits and carryforwards, and the effectiveness of our taxplanning strategies. 40Table of ContentsResults of OperationsYears Ended September 28, 2013, September 29, 2012 and October 1, 2011. The following table presents our key operating results. Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)Net sales$5,917,124 $6,093,334 $6,602,411Gross profit$426,817 $435,782 $510,351Gross margin7.2% 7.2% 7.7%Operating expenses$269,188 $298,292 $298,354Operating income$157,629 $137,490 $211,997Operating margin2.7% 2.3% 3.2%Net income$79,351 $180,234 $68,917 Net Sales Net sales decreased from $6.1 billion for 2012 to $5.9 billion for 2013, a decrease of 2.9%. Net sales decreased from $6.6 billion for 2011 to $6.1billion for 2012, a decrease of 7.7%. Sales by end market were as follows: Year Ended 2013 vs. 2012 2012 vs. 2011 September 28,2013 September 29,2012 October 1,2011 Increase/(Decrease) Increase/(Decrease) (Dollars in thousands)Communications$2,858,343 $2,858,827 $3,134,550 $(484) — % $(275,723) (8.8)%Industrial, Defense and Medical1,590,875 1,547,127 1,609,370 43,748 2.8 % (62,243) (3.9)%Computing and Storage811,279 966,851 913,062 (155,572) (16.1)% 53,789 5.9 %Multimedia656,627 720,529 945,429 (63,902) (8.9)% (224,900) (23.8)%Total$5,917,124 $6,093,334 $6,602,411 $(176,210) (2.9)% $(509,077) (7.7)%Comparison of 2013 to 2012Sales to customers in our computing and storage and multimedia end markets decreased significantly from 2012 to 2013 primarily as a result ofreduced demand from existing customers and the wind-down of certain customer programs. These decreases were partially offset by growth in our servicesbusiness within the industrial, defense and medical end market.Comparison of 2012 to 2011Sales to customers in our communications end market decreased significantly from 2011 to 2012 primarily as a result of reduced demand fromexisting customers, particularly for wireless communications products. Sales in the multimedia market decreased significantly from 2011 to 2012 primarilyas a result of reduced demand for set-top boxes. Sales in our industrial, defense and medical end market decreased from 2011 to 2012 primarily due to weakerdemand for semiconductor capital equipment. The increase from 2011 to 2012 in our computing and storage end market was primarily attributable toincreased demand from existing customers, both for established programs and new program wins for new technologies introduced by our customers.Gross Margin Gross margin was 7.2%, 7.2% and 7.7% in 2013, 2012 and 2011, respectively. In 2013, the gross margin for our CPS business improved to10.8%, from 8.8% in 2012. This improvement resulted primarily from better business mix, the effect of previous restructuring actions, and increasedbusiness volume. The improvement in CPS gross margin was offset by a gross41Table of Contentsmargin decrease in our IMS segment of 50 basis points, from 6.6% in 2012 to 6.1% in 2013. This decrease resulted primarily from decreased sales. Thedecrease in gross margin from 2011 to 2012 was primarily attributable to decreased sales, especially for our CPS business which typically has highercontribution margins than our integrated manufacturing solutions. We have experienced fluctuations in gross margin in the past and may continue to do so inthe future. Fluctuations in our gross margins may be caused by a number of factors, including:•Changes in customer demand and sales volumes for our vertically integrated system components and subassemblies;•Changes in the overall volume of our business;•Changes in the mix of high and low margin products demanded by our customers;•Parts shortages and operational disruption caused by natural disasters;•Greater competition in the EMS industry and pricing pressures from OEMs due to greater focus on cost reduction;•Provisions for excess and obsolete inventory;•Level of operational efficiency;•Pricing pressure in the electronics industry resulting from economic conditions , with EMS companies competing more aggressively on cost toobtain new or maintain existing business;•Wage inflation and rising materials costs; and•Our ability to transition manufacturing and assembly operations to lower cost regions in an efficient manner.Selling, General and Administrative Selling, general and administrative expenses were $238.1 million, $240.9 million and $247.1 million in 2013, 2012 and 2011, respectively. As apercentage of net sales, selling, general and administrative expenses were 4.0% for 2013 and 2012, and 3.7% for 2011. The decrease in absolute dollars from2012 to 2013 was primarily attributable to reduced professional fees partially offset by increased bad debt expense associated with a distressed customer. Thedecrease in absolute dollars from 2011 to 2012 was primarily attributable to lower personnel-related costs. Research and Development Research and development expenses were $25.6 million, $21.9 million and $20.8 million in 2013, 2012 and 2011, respectively. As a percentage ofnet sales, research and development expenses were 0.4% for 2013 and 2012, and 0.3% for 2011. The increase in absolute dollars in each year was primarilyattributable to additional headcount for new projects in our computing and storage end market.Restructuring Restructuring Plans - 2012In 2012, we initiated restructuring plans related to four plant closures and business reorganizations. Costs associated with these plans are expected to be$29.8 million and to include employee severance, costs related to facilities, asset impairment charges and other exit costs. In connection with actions taken todate under these plans, we have recorded employee termination benefits of $14.1 million for 2,150 employees, $9.9 million of costs related to facilities and$4.5 million of asset impairment charges. These plans are expected to be completed within the next six months. As of September 28, 2013, $0.7 million ofseverance remains payable and is expected to be paid in early 2014.Restructuring Plans — Prior to 2012Due to completion of all actions under restructuring plans initiated prior to 2012 and immateriality of the remaining accrual balance related to suchplans, these plans have been combined for disclosure purposes. We expect to pay the majority of accrued restructuring costs by the end of 2015. In connectionwith these plans, we expect to incur restructuring costs in future periods associated primarily with former sites for which the Company is or may beresponsible for environmental remediation and vacant facilities. Costs incurred with respect to vacant facilities consist primarily of 1) costs to maintain vacantfacilities that are owned until such facilities can be sold and 2) the portion of the Company's lease payments and operating costs that have not been recovereddue to the absence of sublease income for vacant leased properties.42Table of ContentsBelow is a summary of restructuring costs associated with facility closures and other consolidation efforts: 2012 RestructuringPlan Prior to 2012Restructuring Plans Total (In thousands)Accrual balance at October 2, 2010$— $6,532 $6,532Employee severance and benefits— 9,041 9,041Leases and facilities shutdown costs— 19,683 19,683Non-cash charges— 5,725 5,725Cash paid for employee terminations— (8,144) (8,144)Cash paid for leases and facilities shutdown costs— (19,369) (19,369)Non-cash charges— (5,725) (5,725)Accrual balance at October 1, 2011— 7,743 7,743Employee severance and benefits11,618 827 12,445Leases and facilities shutdown costs545 14,465 15,010Non-cash charges3,482 3,396 6,878Cash paid for employee terminations(1,317) (5,776) (7,093)Cash paid for leases and facilities shutdown costs(545) (12,568) (13,113)Non-cash charges(3,482) (3,396) (6,878)Accrual balance at September 29, 201210,301 4,691 14,992Employee severance and benefits2,426 358 2,784Leases and facilities shutdown costs7,562 10,223 17,785Non-cash charges2,773 1,568 4,341Cash paid for employee terminations(12,041) (573) (12,614)Cash paid for leases and facilities shutdown costs(7,566) (9,103) (16,669)Non-cash charges(2,773) (1,568) (4,341)Accrual balance at September 28, 2013$682 $5,596 $6,278 Our IMS segment incurred restructuring costs under all restructuring plans of $11.9 million, $19.0 million and $14.2 million for 2013, 2012 and2011, respectively.The recognition of restructuring charges requires us to make judgments and estimates regarding the nature, timing and amount of costs associatedwith planned exit activities, including estimates of severance and benefit payments, environmental remediation costs and sublease income. Our estimates offuture liabilities may change, requiring us to record additional restructuring charges or reduce the amount of liabilities already recorded.Amortization of Intangible Assets During 2013, 2012 and 2011, we recorded amortization of intangible assets of $1.9 million, $3.1 million and $3.8 million, respectively. Intangibleassets consist primarily of intellectual property and customer relationships obtained through acquisitions. The decrease in amortization expense of $1.2million from 2012 to 2013 was primarily due to certain intangible assets from previous acquisitions becoming fully amortized and a write-off of $0.6 millionof intangible assets due to closure of a plant in 2012.Asset Impairments During 2013, 2012 and 2011, we recorded asset impairment charges of $2.1 million, $2.4 million and $0.5 million, respectively, related to declinesin the fair value of certain real properties being marketed for sale below the carrying amount of such properties.43Table of ContentsGain on Sales of Long-lived AssetsDuring 2013, 2012 and 2011, we recognized $23.4 million, $1.3 million and $3.5 million, respectively, of gains primarily from the sales of certainreal properties.Interest Income and Expense Interest income was $1.0 million, $1.4 million and $1.9 million in 2013, 2012 and 2011, respectively. The decrease in each year was due to lowerinterest rates and average cash and cash equivalents balances. Interest expense was $41.0 million, $71.7 million and $99.1 million in 2013, 2012 and 2011, respectively. The decrease from 2012 to 2013 wasprimarily due to the redemption of $257.4 million of long-term debt in 2013. The decrease from 2011 to 2012 was primarily due to the redemption of $400million of long-term debt in 2012. Other Income (Expense), net Other income (expense), net was $(12.8) million, $(0.3) million and $0.9 million in 2013, 2012 and 2011, respectively. The following tablesummarizes the major components of other income (expense), net (in thousands): Year ended September 28,2013 September 29, 2012 October 1, 2011Foreign exchange gains (losses)$(3,091) $(4,144) $435Loss from dedesignation of interest rate swap(14,903) — —Other, net5,162 3,853 457Total$(12,832) $(291) $892We have interest rate swaps with an aggregate notional amount of $257 million that were entered into in 2007 to hedge LIBOR-based variable rateinterest payments expected to occur through June 15, 2014. During the first quarter of 2013, we determined, based on our intention of redeeming $257.4million of our debt due in 2014, that it was no longer probable that LIBOR-based, variable rate interest payments would occur on $257 million of debtthrough June 15, 2014. Accordingly, we dedesignated our interest rate swaps in their entirety in the first quarter of 2013 and recorded a charge of $14.9million, representing the portion of the value of the interest rate swaps previously recorded in accumulated other comprehensive income for which it was nolonger probable that LIBOR-based variable rate interest payments would occur. During the second quarter of 2013, we redeemed our 2014 Notes in full using acombination of cash on hand and borrowings under our revolving credit facility (LIBOR-based, variable rate facility). Therefore, LIBOR-based variable ratepayments are only expected to occur on forecasted borrowings under our revolving credit facility and only during the period of time these borrowings areexpected to be outstanding.We reduce our exposure to currency fluctuations through the use of foreign currency hedging instruments; however, hedges are established based onforecasts of foreign currency balances. To the extent actual amounts differ from forecasted amounts, we will have exposure to currency fluctuations, resultingin foreign exchange gains or losses. Loss on Extinguishments of Debt In 2013, we fully redeemed $257.4 million of long term debt due in 2014 and recognized a loss on extinguishment of $1.4 million, consistingprimarily of the write-off of unamortized debt issuance costs.In 2012, we fully redeemed $400 million of long-term debt due in 2016 and recognized a loss on extinguishment of $16.9 million, consisting ofredemption premiums of $10.9 million and a write-off of unamortized debt issuance costs of $6.0 million.In 2011, we repurchased or fully redeemed $580 million of our debt prior to maturity and recognized a loss on extinguishment of $16.1 million,consisting of redemption premiums of $9.4 million, third party costs of $1.3 million and a write-off of unamortized debt issuance costs of $5.4 million.44Table of ContentsProvision for (benefit from) Income Taxes We recorded an income tax provision of $24.1 million in 2013, an income tax benefit of $130.3 million in 2012 and an income tax provision of $30.6million in 2011. Our effective tax rates were 23.3%, (260.9)% and 30.8% for 2013, 2012 and 2011, respectively. The tax provision for 2013 was lower thanthe amount expected based on the federal statutory rate primarily due to a partial release of our deferred tax assets valuation allowance of $21.5 million.The tax benefit for 2012 was primarily due to a $158.7 million partial release of our deferred tax asset valuation allowance, as discussed furtherbelow.Prior to 2012, based on historical evidence (primarily cumulative losses), we recorded a valuation allowance against our deferred tax assets in theU.S. and certain foreign jurisdictions. A valuation allowance is required to be established or maintained when, based on currently available information andother factors, it is more likely than not that all or a portion of the deferred tax assets will not be realized. We assess our valuation allowance against deferred taxassets on a regular basis. We consider all available positive and negative evidence, including future reversals of temporary differences, projected future taxableincome, tax planning strategies and recent financial results. During the fourth quarters of 2013 and 2012, we concluded that it was more likely than not thatwe would be able to realize the benefit of a portion of our deferred tax assets in the future. We based this conclusion on recent historical book and taxableincome, recent global restructuring and projections of future operating income. As a result, we released $21.5 million and $158.7 million during 2013 and2012, respectively, of the valuation allowance attributable to certain U.S. and foreign deferred tax assets and net operating losses. We will continue to evaluateall evidence in future periods to determine if a further release of the valuation allowance is warranted. Liquidity and Capital Resources Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands) Net cash provided by (used in): Operating activities$317,889 $215,413 $234,908Investing activities(42,870) (78,027) (98,105)Financing activities(279,259) (366,813) (88,954)Effect of exchange rate changes(2,503) (1,243) (373)Increase (decrease) in cash and cash equivalents$(6,743) $(230,670) $47,476Key working capital management measures As of September 28, 2013 September 29, 2012Days sales outstanding (1)55 58Inventory turns (2)7.0 7.1Accounts payable days (3)61 57Cash cycle days (4)46 52(1)Days sales outstanding (a measure of how quickly we collect our accounts receivable), or "DSO", is calculated as the ratioof average accounts receivable, net, to average daily net sales for the quarter.(2)Inventory turns (annualized) are calculated as the ratio of four times our cost of sales for the quarter to averageinventory.(3)Accounts payable days (a measure of how quickly we pay our suppliers), or "DPO", is calculated as the ratio of 365 days to accounts payable turns, inwhich accounts payable turns is calculated as the ratio of four times our cost of sales for the quarter to average accounts payable.(4)Cash cycle days is calculated as the ratio of 365 days to inventory turns, plus days sales outstanding minus accountspayable days.45Table of ContentsCash and cash equivalents were $402.9 million at September 28, 2013 and $409.6 million at September 29, 2012. Our cash levels vary during anygiven period depending on the timing of collections from customers and payments to suppliers, the extent and timing of borrowing activities and other factors.Working capital was $1.0 billion at September 28, 2013 and $1.1 billion at September 29, 2012.Net cash provided by operating activities was $317.9 million, $215.4 million and $234.9 million for 2013, 2012 and 2011, respectively. Cashflows from operating activities consists of: 1) net income adjusted to exclude non-cash items such as depreciation and amortization, stock-based compensationexpense, etc., and 2) changes in net operating assets, which are comprised of accounts receivable, inventories, prepaid expenses and other assets, accountspayable, accrued liabilities and other long-term liabilities.During 2013, we generated $180.3 million of cash from net income, excluding non-cash items, and $137.6 million of cash from the reduction of ournet operating assets, resulting primarily from a decrease in inventories and accounts receivable of $44.3 million and $56.8 million, respectively, and anincrease in accounts payable of $22.3 million. These changes were primarily due to our continued emphasis on working capital management and, to a lesserextent, decreased business volume. Our DSO (a measure of how quickly we collect our accounts receivable) decreased from 58 days at the end of 2012 to 55days at the end of 2013 primarily as a result of better collections performance. Our AP days (a measure of how quickly we pay our suppliers) were 61 daysand 57 days at the end of 2013 and 2012, respectively, due to a change in timing of payments to certain suppliers and a favorable change in the compositionof accounts payable from suppliers with which we have shorter payment terms to suppliers with longer payment terms.In 2012, we generated $163.3 million of cash from net income, excluding non-cash items, and $52.1 million of cash from the reduction of our netoperating assets, resulting primarily from a decrease in inventories and accounts receivable of $63.4 million and $12.9 million, respectively, partially offsetby a decrease in accounts payable of $48.4 million. These decreases were caused primarily by decreased business volume in 2012. AP days were 57 days atthe end of both periods and inventory turns were 7.1 and 7.0 for 2012 and 2011, respectively. Our DSO increased from 55 days at October 1, 2011 to 58days at September 29, 2012. The increase resulted primarily from an unfavorable change in the composition of accounts receivable from customers withshorter payment terms to customers with longer payment terms, partially offset by a favorable shift in the linearity of shipments.Net cash used in investing activities was $42.9 million, $78.0 million and $98.1 million for 2013, 2012 and 2011, respectively. In 2013, we used$76.0 million of cash for capital expenditures and received proceeds of $33.1 million from asset sales, primarily from a property that was held-for-sale. In2012, we used $78.6 million of cash for capital expenditures, received proceeds of $4.8 million from asset sales, and made payments of $5.0 million inconnection with business combinations. Net cash used in financing activities was $279.3 million, $366.8 million and $89.0 million for 2013, 2012 and 2011, respectively. In 2013, wefully redeemed $257.4 million of debt due in 2014, repaid $37.7 million of net short-term borrowings and reduced our restricted cash by $5.8 million. In2012, we fully redeemed $400 million of debt due in 2016 for $410.8 million and received net proceeds of $39.5 million in connection with the issuance of$40 million of secured debt. As of September 28, 2013, we had $562.3 million of total debt outstanding under various debt instruments, a net reduction of $295.1 million fromSeptember 29, 2012, and a net reduction of $655.3 million from October 1, 2011.Secured Debt. During the fourth quarter of 2012, we borrowed $40 million using our corporate campus as collateral (Secured Debt due 2015). Thesecured debt matures in 2015, bears interest at LIBOR plus a spread or the bank's prime rate plus a spread, and includes two one-year renewal options subjectto lender's approval. Senior Notes Due 2019. During 2011, we issued $500.0 million aggregate principal amount of senior notes due 2019 (the "2019 Notes"). The 2019Notes mature on May 15, 2019 and bear interest at an annual rate of 7%, payable semi-annually in arrears in cash.The 2019 Notes are senior unsecured obligations and are fully and unconditionally guaranteed on a senior, unsecured basis by substantially all ofour domestic subsidiaries. We may redeem all or any portion of the 2019 Notes at any time prior to May 15, 2014, at par plus accrued and unpaid interestand a make-whole premium. We may redeem all or any portion of the 2019 Notes beginning on or after May 15, 2014, at redemption prices ranging from100% to105.25% of principal amount of the 2019 Notes, plus accrued and unpaid interest. Following a change of control, as defined, each holder of the 2019Notes shall have the right to require us to repurchase all or any portion of such holder's 2019 Notes at a purchase price equal to 101% of the principal amount,plus accrued and unpaid interest.46Table of ContentsWe entered into an interest rate swap with a single counterparty to hedge our exposure to changes in the fair value of the 2019 Notes resulting fromchanges in interest rates. The swap agreement, with a notional amount of $500 million and an expiration date of May 15, 2019, was entered intocontemporaneously with the 2019 Notes and effectively converts these notes from fixed-rate debt to variable-rate debt. Pursuant to the interest rate swap, wepay the swap counterparty a variable rate equal to the three-month LIBOR plus a spread and receive a fixed rate of 7.0% from the swap counterparty. Inaccordance with Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging, the interest rate swap is accounted for as a fair value hedgebut is exempt from periodic assessment of hedge effectiveness.8.125% Senior Subordinated Notes. During 2006, we issued $600 million of 8.125% Senior Subordinated Notes due 2016. During the thirdquarter of 2011, we redeemed $200 million of these notes and fully redeemed all remaining outstanding notes during 2012 in two separate transactions usingprimarily cash on hand.Senior Floating Rate Notes. In 2007, we issued $300 million of Senior Floating Rate Notes due June 15, 2014. We repurchased $42.6 million ofthese notes in 2009 and the remaining outstanding balance in the second quarter of 2013.We have interest rate swap agreements with two independent counterparties to hedge interest rate exposure on variable-rate debt. The interest rateswaps were accounted for as cash flow hedges until they were dedesignated in their entirety during the first quarter of 2013 as we determined, based on ourintention of redeem the 2014 Notes, that it was no longer probable that LIBOR-based variable rate interest payments would occur on the $257 million of debtthrough June 15, 2014. However, LIBOR-based variable rate interest payments are expected to be incurred on forecasted borrowings under our revolving creditfacility during the period of time these borrowings are expected to be outstanding. The swaps have a notional amount of $257 million and expire in June 2014.Asset-backed Lending Facility. In 2009, we entered into a Loan, Guaranty and Security Agreement, among us, the financial institutions partythereto from time to time as lenders, and Bank of America, N.A., as agent for such lenders. During the second quarter of 2012, we entered into an Amendedand Restated Loan, Guaranty and Security Agreement (the “Loan Agreement”), among us, the financial institutions party thereto from time to time as lenders,and Bank of America, N.A., as agent for such lenders. The Loan Agreement amended and restated our existing Loan, Guaranty and Security Agreement.The Loan Agreement provides for a $300 million secured asset-backed revolving credit facility with a $100 million letter of credit sublimit. Thefacility may be increased by an additional $200 million upon obtaining additional commitments from the lenders then party to the Loan Agreement or newlenders. The Loan Agreement expires on March 16, 2017 (the “Maturity Date”).Loans may be advanced under the Loan Agreement based on a borrowing base derived from specified percentages of the value of eligible accountsreceivable and inventory. The borrowing base is subject to certain customary reserves and eligibility criteria. If, at any time, the aggregate principal amount ofthe loans outstanding plus the face amount of undrawn letters of credit under the Loan Agreement exceed the borrowing base then in effect, we must make apayment or post cash collateral (in the case of letters of credit) in an amount sufficient to eliminate such excess. As of September 28, 2013, there were noborrowings under this facility, $23.1 million in letters of credit were outstanding and we were eligible to borrow $266.4 million. Loans under the Loan Agreement bear interest, at our option, at a rate equal to LIBOR or a base rate equal to Bank of America, N.A.'s announcedprime rate, in each case plus a spread. A commitment fee accrues on any unused portion of the facility at a rate per annum based on usage. Interest on loans ispayable quarterly in arrears with respect to base rate loans and at the end of an interest period in the case of LIBOR loans. Principal, together with accrued andunpaid interest, is due on the Maturity Date. Our obligations under the Loan Agreement are secured by certain accounts receivable, inventory and other assets.Short-term DebtAs of September 28, 2013, certain of our foreign subsidiaries had a total of $184 million of short-term borrowing facilities, under which noborrowings were outstanding. The loan agreements contain certain negative covenants that, upon default, permit the bank to deny any further advances orextension of credit or to terminate the loan agreement. These facilities expire at various dates through the second quarter of 2015.47Table of ContentsDebt CovenantsOther than our Secured Debt due 2015 which uses certain of our real property as collateral, our debt agreements do not contain financial covenantscurrently applicable to us, but do include a number of restrictive covenants, including restrictions on incurring additional debt, making investments and otherrestricted payments, selling assets, paying dividends and redeeming or repurchasing capital stock and debt, subject to certain exceptions. Our Secured DebtDue 2015 requires us to maintain a minimum fixed charge coverage ratio during its term. These covenants could constrain our ability to grow our businessthrough acquisition or engage in other transactions which the covenants would otherwise restrict, including refinancing our existing debt. In addition, suchagreements include covenants requiring, among other things, that we file quarterly and annual financial statements with the SEC, comply with all laws, payall taxes and maintain casualty insurance. If we are not able to comply with all of these covenants, for any reason, some or all of our outstanding debt as wellas all amounts payable under our interest rate swaps on such debt, if any, could become immediately due and payable and the incurrence of additional debtunder our asset-backed credit facility would not be allowed, any of which could have a material adverse effect on our liquidity and ability to conduct ourbusiness. As of September 28, 2013, we were in compliance with these covenants.Other Liquidity MattersDuring 2012 and 2013, we reduced our net debt obligations by approximately $655 million, which has resulted in significant interest expensesavings. For example, interest expense was $41.0 million in 2013, compared to $71.7 million in 2012 and $99.1 million in 2011. Despite the significant cashoutlay required to reduce our debt, our total sources of liquidity at the end of 2013 were $853 million, which is an increase of $47 million over this same two-year time period. The increase is primarily attributable to cash generated from operations of over $500 million and increased capacity from short-termborrowing facilities of $284 million. Our next long-term debt maturity in the amount of $40 million will be in 2015, after which an aggregate of $500 millionin notes will be due in 2019. We may consider early redemptions of our debt in future periods, using either our existing cash or proceeds from additional debtor equity financings.In March 2013, our Board approved a $100 million stock repurchase program with no expiration date. The timing of repurchases made under theprogram will depend upon capital needs to support the growth of our business, market conditions and other factors. Although the stock repurchase program isintended to increase stockholder value, purchases of shares made under this program will reduce our liquidity. We did not repurchase any stock under thisprogram in 2013.Beginning in May 2014, the interest rate swap on our 2019 Notes can be terminated at the option of the swap counterparty upon payment to us of amarket termination fee. In such a case, we would no longer pay a variable rate of interest on such notes but would instead pay a fixed rate of 7%, which couldbe higher than the variable rate at the time of termination.In the ordinary course of business, we are or may become party to legal proceedings, claims and other contingencies, including environmental andemployee matters and examinations by government agencies. As of September 28, 2013, we had accrued liabilities of $22.2 million related to such matters. Wecannot accurately predict the outcome of these matters or the amount or timing of cash flows that may be required to defend ourselves or to settle such mattersor that these accruals will be sufficient to fully satisfy our contingent liabilities.As of September 28, 2013, we had a liability of $90.3 million for uncertain tax positions. Our estimate of liabilities for uncertain tax positions isbased on a number of subjective assessments, including the likelihood of a tax obligation being assessed, the amount of taxes (including interest and penalties)that would ultimately be payable, and our ability to settle any such obligations on favorable terms. Therefore, the amount of future cash flows associated withuncertain tax positions may be significantly higher or lower than our recorded liability and we are unable to reliably estimate when cash settlement may occur. We have entered into, and continue to enter into, various transactions that periodically require collateral. These obligations have historically arisenfrom customs, import/export, VAT, utility services, debt financing, foreign exchange contracts and interest rate swaps. We have collateralized, and may fromtime to time collateralize, such obligations as a result of counterparty requirements or for economic reasons. As of September 28, 2013, we had collateral of$6.3 million in the form of cash against certain of our collateralized obligations. Cash used for collateral reduces our cash available for other purposes.Our liquidity needs are largely dependent on changes in our working capital, including the extension of trade credit by our suppliers, investments inmanufacturing inventory, facilities and equipment, repayments of obligations under outstanding indebtedness and redemptions of our outstanding debt andrepurchases of common stock. Our primary sources of liquidity as of September 28, 2013 included: (1) cash of $402.9 million; (2) our $300 million asset-backed credit facility, under which $266.448Table of Contentsmillion, net of letters of credit and borrowings, was available as of September 28, 2013; (3) foreign short-term borrowing facilities of $184.0 million, whichwas fully available as of September 28, 2013; and (4) cash generated from operations. In addition, we are actively marketing a portfolio of surplus real estatewith an aggregate list price of over $80 million. Proceeds from the sales of properties in this portfolio will provide additional liquidity. However, there can be noassurance as to the amount that may actually be realized or the exact timing of any such receipts. We believe our existing cash resources and other sources of liquidity, together with cash generated from operations, will be sufficient to meet ourworking capital requirements through at least the next 12 months. Should demand for our services decrease significantly over the next 12 months or should weexperience increases in delinquent or uncollectible accounts receivable, our cash provided by operations would be adversely impacted.As of September 28, 2013, 51% of our cash balance was held by our foreign subsidiaries. Should we choose or need to remit cash to the UnitedStates, we could incur tax obligations which would reduce the amount of cash ultimately available to the United States. We believe that cash held in the UnitedStates, together with cash available under United States credit facilities and cash from foreign subsidiaries that could be remitted to the United States withouttax consequences, will be sufficient to meet our U.S. liquidity needs for at least the next twelve months.Contractual Obligations The following is a summary of our long-term debt, including interest, and operating lease obligations as of September 28, 2013: Payments Due by Period Contractual ObligationsTotal Less than 1year 1- 3 years 3-5 years More than5 years (In thousands)Long-term debt, including interest$669,699 $31,788 $82,796 $41,992 $513,123Operating leases91,087 26,020 29,259 15,211 20,597Total contractual obligations$760,786 $57,808 $112,055 $57,203 $533,720Interest included above is based on our effective rate after considering both the underlying contractual rate and related interest rate swaps.We also have outstanding firm purchase orders with certain suppliers for the purchase of inventory. These purchase orders are generally short-termin nature. Orders for standard, or catalog, items can typically be canceled with little or no financial penalty. Our policy regarding non-standard or customizeditems dictates that such items are only ordered specifically for customers who have contractually assumed liability for the inventory. In addition, a substantialportion of catalog items covered by our purchase orders are procured for specific customers based on their purchase orders or a forecast under which thecustomer has contractually assumed liability for such material. Accordingly, the amount of liability from purchase obligations under these purchase orders isnot expected to be significant or meaningful. As of September 28, 2013, we had an insignificant amount of capital lease obligations.As of September 28, 2013, we were unable to reliably estimate when cash settlements with taxing authorities may occur with respect to ourunrecognized tax benefits of $90.3 million. Additionally, we have provided guarantees to various third parties in the form of letters of credit totaling $23.1million as of September 28, 2013. The letters of credit cover various guarantees including workers' compensation claims and customs duties. Lastly, we havedefined benefit pension plans with an underfunded amount of $22.3 million at September 28, 2013. We will be required to provide additional funding to theseplans in the future if our returns on plan assets are not sufficient to meet our funding obligations. None of the amounts described in this paragraph areincluded in the table above. Off-Balance Sheet ArrangementsAs of September 28, 2013, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by theSEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses,results of operations, liquidity, capital expenditures, or capital resources that is material to investors.49Table of ContentsQuarterly Results (Unaudited) The following tables contain selected unaudited quarterly financial data for 2013 and 2012. In management's opinion, the unaudited data has beenprepared on the same basis as the audited information and includes all adjustments (consisting only of normal recurring adjustments) necessary for a fairpresentation of the data for the periods presented. Our results of operations have varied and may continue to fluctuate significantly from quarter to quarter. Theresults of operations in any period should not be considered indicative of the results to be expected from any future period. Year ended September 28, 2013 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Net sales$1,494,945 $1,427,642 $1,489,214 $1,505,323 Gross profit$96,928 $100,304 $114,251 $115,334 Gross margin6.5% 7.0% 7.7% 7.7% Operating income$31,462 $45,798 $35,681 $44,688 Operating margin2.1% 3.2% 2.4% 3.0% Net income$621 $21,191 $18,738 $38,801(1)Basic net income per share$0.01 $0.26 0.23 $0.46 Diluted net income per share$0.01 $0.25 0.22 $0.44 Year ended September 29, 2012 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Net sales$1,502,366 $1,463,082 $1,549,302 $1,578,584 Gross profit$109,025 $106,348 $105,252 $115,157 Gross margin7.3% 7.3% 6.8% 7.3% Operating income$39,688 $30,208 $35,394 $32,200 Operating margin2.6% 2.1% 2.3% 2.0% Net income (loss)$8,575 $(1,439) $8,948 $164,150(1)Basic net income (loss) per share$0.11 $(0.02) $0.11 $2.01 Diluted net income (loss) per share$0.10 $(0.02) $0.11 $1.96 (1) During the fourth quarters of 2013 and 2012, we concluded that it was more likely than not that we would be able to realize the benefit of a portion of ourdeferred tax assets in the future. As a result, we released $21.5 million and $158.7 million in 2013 and 2012, respectively, of the valuation allowanceattributable to certain U.S. and foreign deferred tax assets and net operating losses.50Table of ContentsItem 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Our primary exposure to market risk for changes in interest rates relates to certain of our outstanding debt obligations. As of September 28, 2013, wehad $540.0 million of long-term debt, of which $40 million bears interest at a floating rate and $500 million of fixed rate debt, which has been converted tovariable rate debt through the use of an interest rate swap.The effect of an immediate 10% change in interest rates would not have a significant impact on our results of operations.Foreign Currency Exchange Risk We transact business in foreign currencies. Our foreign exchange policy requires that we take certain steps to limit our foreign exchange exposuresresulting from certain assets and liabilities and forecasted cash flows. However, our policy does not require us to hedge all foreign exchange exposures.Furthermore, our foreign currency hedges are based on forecasted transactions and estimated balances, the amount of which may differ from that actuallyincurred. As a result, we can experience foreign exchange gains and losses in our results of operations. Our primary foreign currency cash flows are in certain Asian and European countries, Israel, Brazil and Mexico. We enter into short-term foreigncurrency forward contracts to hedge currency exposures associated with certain monetary assets and liabilities denominated in non-functional currencies.These contracts typically have maturities of up to two months and are not designated as part of a hedging relationship in accordance with ASC Topic 815. Alloutstanding foreign currency forward contracts are marked-to-market at the end of the period with unrealized gains and losses included in other income(expense), net, in the consolidated statements of income. As of September 28, 2013, we had outstanding foreign currency forward contracts in the aggregatenotional amount of $190.2 million.We also utilize foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreign currencyexchange rates. Such exposures result from 1) forecasted sales denominated in currencies other than those used to pay for materials and labor and 2)anticipated capital expenditures denominated in a currency other than the functional currency of the entity making the expenditures. These contracts may be upto twelve months in duration and are accounted for as cash flow hedges under ASC Topic 815. The effective portion of changes in the fair value of thecontracts is recorded in stockholders' equity as a separate component of accumulated other comprehensive income and recognized in earnings when the hedgeditem affects earnings. We had forward contracts related to cash flow hedges in various foreign currencies in the aggregate notional amount of $100.7 million asof September 28, 2013.The net impact of an immediate 10% change in exchange rates would not be material to our consolidated financial statements, provided we accuratelyforecast and estimate our foreign currency exposure. If such forecasts are materially inaccurate, we could incur significant gains or losses.Item 8. Financial Statements and Supplementary Data The information required by this item is included below and incorporated by reference from the financial statement schedule included in “Part IV-Item 15(a)(2)” and the selected quarterly financial data referred to in “Part II-Item 7-Management's Discussion and Analysis of Financial Condition andResults of Operations-Quarterly Results (Unaudited).”51Table of ContentsReport of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Sanmina Corporation: We have audited the accompanying consolidated balance sheets of Sanmina Corporation and subsidiaries (the Company) as of September 28, 2013 and September 29,2012, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period endedSeptember 28, 2013. In connection with our audits of the consolidated financial statements, we have also audited the consolidated financial statement schedule of valuation andqualifying accounts as set forth under Item 15. We have also audited the Company's internal control over financial reporting as of September 28, 2013, based on criteriaestablished in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company'smanagement is responsible for these consolidated financial statements and financial statement schedule, for maintaining effective internal control over financial reporting, and for itsassessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over FinancialReporting appearing under Item 9A. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule and an opinion on theCompany's internal control over financial reporting based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we planand perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal controlover financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting theamounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overallfinancial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing therisk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also includedperforming such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includesthose policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally acceptedaccounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effecton the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectivenessto future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or proceduresmay deteriorate.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 28,2013 and September 29, 2012, and the results of its operations and its cash flows for each of the years in the three-year period ended September 28, 2013, in conformity withU.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financialstatements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also in our opinion, the Company maintained, in all material respects,effective internal control over financial reporting as of September 28, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by theCommittee of Sponsoring Organizations of the Treadway Commission. /s/ KPMG LLP Santa Clara, CaliforniaNovember 27, 201352Table of ContentsSANMINA CORPORATION CONSOLIDATED BALANCE SHEETS As of September 28, 2013 September 29, 2012 (In thousands, except par value)ASSETS Current assets: Cash and cash equivalents$402,875 $409,618Accounts receivable, net of allowances of $11,735 and $12,032, respectively944,816 1,001,543Inventories781,560 826,539Prepaid expenses and other current assets75,337 88,599Total current assets2,204,588 2,326,299Property, plant and equipment, net540,151 569,365Other251,109 272,122Total assets$2,995,848 $3,167,786LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable$956,488 $937,737Accrued liabilities109,363 104,741Accrued payroll and related benefits118,572 117,074Short-term debt22,301 59,995Total current liabilities1,206,724 1,219,547Long-term liabilities: Long-term debt562,512 837,364Other135,048 147,094Total long-term liabilities697,560 984,458Commitments and contingencies (Note 8) Stockholders' equity: Preferred stock, $.01 par value, authorized 5,000 shares, none issued and outstanding— —Common stock, $.01 par value, authorized 166,667 shares, 97,658 and 94,971 shares issued, respectively,and 84,153 and 81,635 shares outstanding, respectively842 817Treasury stock, 13,505 and 13,336 shares, respectively, at cost(215,658) (214,133)Additional paid-in capital6,103,634 6,074,524Accumulated other comprehensive income84,301 63,479Accumulated deficit(4,881,555) (4,960,906)Total stockholders' equity1,091,564 963,781Total liabilities and stockholders' equity$2,995,848 $3,167,786 See accompanying notes to the consolidated financial statements.53Table of ContentsSANMINA CORPORATION CONSOLIDATED STATEMENTS OF INCOME Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands, except per share amounts) Net sales$5,917,124 $6,093,334 $6,602,411Cost of sales5,490,307 5,657,552 6,092,060Gross profit426,817 435,782 510,351Operating expenses: Selling, general and administrative238,072 240,863 247,127Research and development25,571 21,899 20,802Restructuring and integration costs24,910 31,371 29,609Amortization of intangible assets1,896 3,067 3,831Asset impairments2,100 2,390 450Gain on sales of long-lived assets(23,361) (1,298) (3,465)Total operating expenses269,188 298,292 298,354 Operating income157,629 137,490 211,997 Interest income1,014 1,425 1,861Interest expense(41,004) (71,744) (99,114)Other income (expense), net(12,832) (291) 892Loss on extinguishments of debt(1,401) (16,937) (16,098)Interest and other income (expense), net(54,223) (87,547) (112,459)Income before income taxes103,406 49,943 99,538Provision for (benefit from) income taxes24,055 (130,291) 30,621Net income$79,351 $180,234 $68,917 Net income per share: Basic$0.96 $2.22 $0.86Diluted$0.93 $2.16 $0.83 Weighted-average shares used in computing per share amounts: Basic82,834 81,284 80,345Diluted85,403 83,495 83,158 See accompanying notes to the consolidated financial statements.54Table of ContentsSANMINA CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands) Net income$79,351 $180,234 $68,917Other comprehensive income: Changes in unrealized loss on derivative financial instruments, net of tax21,185 6,474 6,978Foreign currency translation adjustments(3,072) (2,543) 5,419Changes in unrecognized net actuarial loss and unrecognized transition costs, net of tax2,709 (11,190) 4,124Comprehensive income$100,173 $172,975 $85,438 See accompanying notes to the consolidated financial statements. 55Table of ContentsSANMINA CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock and Additional Paid-inCapital Treasury Stock Number ofShares Amount Number ofShares Amount AccumulatedOtherComprehensiveIncome AccumulatedDeficit Total (In thousands)BALANCE AT OCTOBER 2, 201093,074 $6,031,971 (13,352) $(214,530) $54,217 $(5,210,057) $661,601Issuances under stock plans961 4,603 — — — — 4,603Cumulative translation adjustment— — — — 5,419 — 5,419Changes in unrealized loss on derivative financialinstruments, net of tax— — — — 6,978 — 6,978Changes in unrecognized net actuarial loss andunrecognized transition costs, net of tax— — — — 4,124 — 4,124Stock-based compensation— 18,896 — — — — 18,896Issuances (repurchases) of treasury stock— (723) 51 702 — — (21)Net income— — — — — 68,917 68,917BALANCE AT OCTOBER 1, 201194,035 $6,054,747 (13,301) $(213,828) $70,738 $(5,141,140) $770,517Issuances under stock plans936 2,595 — — — — 2,595Cumulative translation adjustment— — — — (2,543) — (2,543)Changes in unrealized loss on derivative financialinstruments, net of tax— — — — 6,474 — 6,474Changes in unrecognized net actuarial loss andunrecognized transition costs, net of tax— — — — (11,190) — (11,190)Stock-based compensation— 17,999 — — — — 17,999Issuances (repurchases) of treasury stock— — (35) (305) — — (305)Net income— — — — — 180,234 180,234BALANCE AT SEPTEMBER 29, 201294,971 $6,075,341 (13,336) $(214,133) $63,479 $(4,960,906) $963,781Issuances under stock plans2,687 11,611 — — — — 11,611Cumulative translation adjustment— — — — (3,072) — (3,072)Changes in unrealized loss on derivative financialinstruments, net of tax— — — — 21,185 — 21,185Changes in unrecognized net actuarial loss andunrecognized transition costs, net of tax— — — — 2,709 — 2,709Stock-based compensation— 17,524 — — — — 17,524Issuances (repurchases) of treasury stock— — (169) (1,525) — — (1,525)Net income— — — — — 79,351 79,351BALANCE AT SEPTEMBER 28, 201397,658 $6,104,476 (13,505) $(215,658) $84,301 $(4,881,555) $1,091,564 See accompanying notes to the consolidated financial statements.56Table of ContentsSANMINA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net income$79,351 $180,234 $68,917Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization96,021 99,477 104,571Stock-based compensation expense17,524 17,999 18,896Benefit from doubtful accounts, product returns and other net sales adjustments(325) (826) (1,187)Deferred income taxes(8,355) (155,791) (2,163)Gain on sales of assets(23,559) (1,780) (3,330)Impairment of assets3,082 7,134 450Loss on extinguishments of debt1,401 16,937 16,098Loss from dedesignation of interest rate swap14,903 — —Other, net284 (81) (357)Changes in operating assets and liabilities, net of acquisitions: Accounts receivable56,840 12,896 6,061Inventories44,334 63,365 (46,803)Prepaid expenses and other assets12,158 9,432 (10,075)Accounts payable22,307 (48,412) 71,248Accrued liabilities and other long-term liabilities1,923 14,829 12,582Cash provided by operating activities317,889 215,413234,908CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Net proceeds from sales of long-term investments— 799 59Purchases of property, plant and equipment(75,950) (78,631) (107,574)Proceeds from sales of property, plant and equipment33,080 4,828 24,066Cash paid in connection with business combinations— (5,023) (14,656)Cash used in investing activities(42,870) (78,027) (98,105)CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Change in restricted cash5,760 5,100 12,857Proceeds from short-term borrowings205,456 73,995 62,000Repayments of short-term borrowings(243,151) (74,200) (66,800)Proceeds from revolving credit facility borrowings1,054,520 484,000 —Repayments of revolving credit facility borrowings(1,054,520) (484,000) —Repayments of long-term debt(257,410) (410,843) (590,623)Proceeds from issuance of long-term debt, net of issuance costs— 39,532 489,030Revolving credit facility issuance costs— (2,687) —Net proceeds from stock issuances11,611 2,595 4,603Repurchases of common stock(1,525) (305) (21)Cash used in financing activities(279,259) (366,813) (88,954)Effect of exchange rate changes(2,503) (1,243) (373)Increase (decrease) in cash and cash equivalents(6,743) (230,670) 47,476Cash and cash equivalents at beginning of year409,618 640,288 592,812Cash and cash equivalents at end of year$402,875 $409,618 $640,288 Cash paid during the year: Interest, net of capitalized interest$42,184 $67,994$91,094Income taxes, net of refunds$18,142 $12,723 $12,326 See accompanying notes to the consolidated financial statements.57Table of ContentsSANMINA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Organization of Sanmina Sanmina Corporation (“Sanmina,” or the “Company”) was incorporated in Delaware in 1989. The Company is a leading global provider ofintegrated manufacturing solutions, components, products and repair, logistics and after-market services. The Company provides these comprehensivesolutions primarily to original equipment manufacturers (OEMs) in the following industries: communications networks; computing and storage; multimedia;industrial and semiconductor capital equipment; defense and aerospace; medical; clean technology and automotive.The Company's operations are managed as two businesses:1)Integrated Manufacturing Solutions (IMS). IMS is a single operating segment consisting of printed circuit board assembly and test, finalsystem assembly and test, and direct-order-fulfillment.2)Components, Products and Services (CPS). Components include interconnect systems (printed circuit board fabrication, backplane andcable assemblies) and mechanical systems (enclosures, precision machining and plastic injection molding); Products include memory andsolid state drive products from Viking Technology, defense and aerospace products from SCI Technology, storage products from Newisysand optical and RF (Radio Frequency) modules; and Services include design, engineering, logistics and repair services.In accordance with the accounting literature for segment reporting, the Company's only reportable segment is IMS, which represented 80% of totalrevenue in 2013. The CPS business consists of multiple operating segments which do not meet the quantitative thresholds for being presented as reportablesegments. Therefore, financial information for these operating segments will be presented in a single category entitled “Components, Products and Services”.Effective in the fourth quarter of 2013, the Optical and RF modules group was moved to CPS (previously included in IMS). The Optical and RF modulesgroup offers customers engineering solutions and product designs, including joint product design services with customers. As a result, this group createsintellectual property that can be used in proprietary designs and products similar to the other product businesses in CPS. Accordingly, the results presentedunder segment reporting reflect the change in segment reporting for all periods presented to conform to the current period segment reporting structure. Thechange in segment reporting does not affect the Company’s previously reported consolidated financial statements. Basis of PresentationFiscal Year. The Company operates on a 52 or 53 week year ending on the Saturday nearest September 30. Fiscal 2013, 2012 and 2011 were each52 weeks. All references to years relate to fiscal years unless otherwise noted.Principles of Consolidation. The consolidated financial statements include the Company's accounts and those of its subsidiaries. All intercompanyaccounts and transactions have been eliminated.Note 2. Summary of Significant Accounting Policies Management Estimates and Uncertainties. The preparation of consolidated financial statements in conformity with generally accepted accountingprinciples in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosures of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during thereporting period. Significant estimates made in preparing the consolidated financial statements relate to allowances for accounts receivable; provisions forexcess and obsolete inventories, product returns, warranties, restructuring costs, environmental matters, and legal exposures; determining liabilities foruncertain tax positions; determining the realizability of deferred tax assets; determining fair values of tangible and intangible assets for purposes of impairmenttests; determining fair values of interest rate swaps and equity awards; and determining forfeiture rates, volatility and expected life assumptions for purposesof calculating stock compensation expense. Actual results could differ materially from these estimates. Financial Instruments and Concentration of Credit Risk. Financial instruments consist of cash and cash equivalents, foreign currency forwardcontracts, interest rate swap agreements, accounts receivable, accounts payable and debt obligations. With the exception of certain of the Company's debtobligations (refer to Note 4. Fair Value and Note 5. Derivative Financial Instruments), the fair value of these financial instruments approximates their carryingamount as of September 28, 2013 and58Table of ContentsSeptember 29, 2012 due to the nature, or short maturity, of these instruments, or the fact that the instruments are recorded at fair value on the consolidatedbalance sheets. Cash and Cash Equivalents. The Company considers all highly-liquid investments with a maturity of three months or less at the time of purchaseto be cash equivalents. Cash and cash equivalents consisted of the following: As of September 28, 2013 September 29, 2012 (In thousands)Cash balances$402,439 $409,183Money market funds436 435Total$402,875 $409,618 Accounts Receivable and Other Related Allowances. The Company estimates uncollectible balances, product returns and other adjustments andhad allowances of $11.7 million and $12.0 million as of September 28, 2013 and September 29, 2012, respectively, for these items. One of the Company'smost significant risks is the ultimate realization of its accounts receivable. This risk is mitigated by ongoing credit evaluations of customers and frequentcontact with customers, especially the most significant customers, which enable the Company to monitor changes in its customers' business operations andrespond accordingly. To establish the allowance for doubtful accounts, the Company estimates credit risk associated with accounts receivable by consideringthe creditworthiness of its customers, past experience, specific facts and circumstances, and the overall economic climate in industries that it serves. Toestablish the allowance for product returns and other adjustments, the Company primarily utilizes historical data. Inventories. Inventories are stated at the lower of cost (first-in, first-out method) or market. Cost includes labor, materials and manufacturingoverhead. Provisions are made to reduce excess and obsolete inventories to their estimated net realizable values. The ultimate realization of inventory carryingamounts is primarily affected by changes in customer demand. Inventory provisions are established based on forecasted demand, past experience with specificcustomers, the age and nature of the inventory, the ability to redistribute inventory to other programs or back to suppliers, and whether customers arecontractually obligated and have the ability to pay for the related inventory. Certain payments received from customers for inventory held by the Company arerecorded as a reduction of inventory.Property, Plant and Equipment, net. Property, plant and equipment are stated at cost or, in the case of property and equipment acquired throughbusiness combinations, at fair value as of the acquisition date. Depreciation is provided on a straight-line basis over 20 to 40 years for buildings and 3 to15 years for machinery, equipment, furniture and fixtures. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term oruseful life of the asset. The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amountof an asset or asset group may not be recoverable. An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future netcash flows the asset or asset group is expected to generate. If an asset or asset group is considered to be impaired, the impairment to be recognized is measuredby the amount by which the carrying amount of the asset or asset group exceeds its fair value. An asset group is the unit of accounting, which represents thelowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets. For vertically integrated plants, the Companyhas determined that each individual plant, together with the other plants with which it is vertically integrated, is an asset group. For all other plants, eachindividual plant is an asset group. For asset groups for which the primary asset is a building, the Company estimates fair value based on data provided bycommercial real estate brokers. For other asset groups, the Company estimates fair value based on projected discounted future net cash flows.Foreign Currency Translation. For foreign subsidiaries using the local currency as their functional currency, assets and liabilities are translated toU.S. dollars at exchange rates in effect at the balance sheet date and income and expenses are translated at average exchange rates. The effects of thesetranslation adjustments are reported in stockholders' equity as a component of accumulated other comprehensive income. For all entities, remeasurementadjustments for non-functional currency monetary assets and liabilities are included in other income (expense), net in the accompanying consolidated59Table of Contentsstatements of income. Additionally, remeasurement gains and losses arising from long-term intercompany loans denominated in a currency other than anentity's functional currency are recorded in accumulated other comprehensive income if repayment of the loan is not anticipated in the foreseeable future. Derivative Instruments and Hedging Activities. The Company conducts business on a global basis in numerous currencies, which exposes theCompany to movements in foreign currency exchange rates. The Company uses derivatives, such as foreign currency forward contracts and interest rateswaps, to minimize the volatility of earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. The Company accounts for derivative instruments and hedging activities in accordance with ASC Topic 815, Derivatives and Hedging, whichrequires each derivative instrument to be recorded on the consolidated balance sheets at its fair value as either an asset or a liability. If the derivative isdesignated as a cash flow hedge, the effective portion of changes in the fair value of the derivative is recorded in stockholders' equity as a separate componentof accumulated other comprehensive income and is recognized in earnings when the hedged item affects earnings. Ineffective portions of changes in the fairvalue of cash flow hedges are immediately recognized in earnings. If the derivative is designated as a fair value hedge, changes in the fair value of the derivativeand of the item being hedged are recognized in earnings in the current period.Derivative instruments are entered into for periods of time consistent with the related underlying exposures and are not entered into for speculativepurposes. At the inception of a hedge, the Company documents all relationships between derivative instruments and related hedged items, as well as its risk-management objectives and strategies for the hedging transaction. The Company's foreign currency forward contracts and interest rate swaps potentially expose the Company to credit risk to the extent thecounterparties may be unable to meet the terms of the agreement. The Company minimizes such risk by seeking high quality counterparties. The Companyhas not incurred material losses as a result of default by counterparties.Revenue Recognition. The Company derives revenue principally from sales of manufacturing services, components and other products. Othersources of revenue include order fulfillment, logistic and repair services, and sales of certain inventory, including raw materials, to customers who reschedule,amend or cancel purchase orders after the Company has procured inventory to fulfill the customers' purchase orders. The Company recognizes revenue formanufacturing services, components, products and sales of certain inventory when a persuasive arrangement between the Company and the buyer exists,usually in the form of a purchase order received from the Company's customer, the price is fixed or determinable, delivery or performance has occurred andcollectability is reasonably assured. Generally, there are no formal customer acceptance requirements or further obligations related to the product or theinventory subsequent to transfer of title.The Company's order fulfillment and logistics services involve warehousing and managing finished product on behalf of a customer. These servicesare usually provided in conjunction with manufacturing services at one of the Company's facilities. In these instances, revenue for manufacturing services isdeferred until the related goods are delivered to the customer, which is upon completion of order fulfillment and logistics services. In certain instances, theCompany's facility used to provide order fulfillment and logistics services is controlled by the customer pursuant to a separate arrangement. In these instances,revenue for manufacturing services is recognized upon receipt of the manufactured product at the customer-controlled location and revenue for order fulfillmentand logistics services is recognized separately as the services are provided. Revenue for repair services is generally recognized upon completion of the services.Provisions are made for estimated sales returns and other adjustments at the time revenue is recognized. Such provisions were not material to theconsolidated financial statements for any period presented herein. The Company presents sales net of sales taxes and value-added taxes in its consolidatedstatements of income. Amounts billed to customers for shipping and handling are recorded as revenue and shipping and handling costs incurred by theCompany are included in cost of sales. Warranty Reserve. The Company establishes a warranty reserve for shipped products based on individual manufacturing contract requirementsand past warranty experience. Restructuring Costs. The Company incurs restructuring costs in connection with closure or consolidation of excess manufacturing oradministrative facilities, as well as other exit activities, and records restructuring charges for employee termination costs, long-lived asset impairments, costsrelated to leased facilities to be abandoned or subleased, and other exit-related costs. These charges are incurred pursuant to formal plans developed andapproved by management. The recognition of restructuring charges requires the Company's management to make judgments and estimates regarding thenature, timing, and amount of costs associated with the planned exit activity, including estimates of severance and benefit payments, environmentalremediation costs and sublease income. Estimates of future liabilities may change, requiring the Company to record additional60Table of Contentsrestructuring charges or to reduce the amount of liabilities already recorded. At the end of each reporting period, the Company evaluates remaining accrualbalances to ensure their adequacy, that no excess accruals are retained and that utilization of the accruals is for the intended purpose in accordance withdeveloped exit plans. In the event circumstances change and an accrual is no longer required, the accrual is reversed through restructuring expense. Stock-Based Compensation. The Company measures compensation expense based on the estimated fair value of stock awards. The Company primarily uses the Black-Scholes option pricing model to estimate the fair value of stock options. The Black-Scholes model requiresthe use of highly subjective and complex assumptions, including the option's expected term and the price volatility of the underlying stock. The expected termof options is based on observed historical exercise patterns and expected volatility is based on historical volatility over the expected life of the options. Forrestricted stock units, fair value is the fair market value of the Company's stock on the date of grant. With respect to awards with performance conditionsonly, compensation expense is recognized only if it is deemed probable that the performance conditions will be met. For awards with a market condition, themarket condition is considered in the grant-date fair value of the award using a lattice model which utilizes multiple input variables to determine the probabilityof the specified market condition being achieved. For these types of awards, expense is recognized over the requisite service period regardless of whether themarket condition is satisfied, provided that the requisite service period is completed. Compensation expense for all stock awards is reduced by forfeitures,which are estimated based on observed historical forfeiture patterns.Income taxes. The Company estimates its income tax provision or benefit in each of the jurisdictions in which it operates, including estimatingexposures and making judgments regarding the realizability of deferred tax assets. The carrying value of the Company's net deferred tax assets is based on theCompany's belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferredtax assets. A valuation allowance has been established for deferred tax assets which do not meet the “more likely than not” criteria discussed above.The Company's tax rate is highly dependent upon the geographic distribution of its worldwide income or losses, the tax regulations and tax holidaysin each geographic region, the availability of tax credits and carryforwards, including net operating losses, and the effectiveness of its tax planning strategies. The Company makes an assessment of whether each income tax position is “more likely than not” of being sustained on audit, including resolutionof related appeals or litigation, if any. For each income tax position that meets the “more likely than not” recognition threshold, the Company then assesses thelargest amount of tax benefit that is greater than 50% likely of being realized upon effective settlement with the tax authority. Interest and penalties related tounrecognized tax benefits are recognized as a component of income tax expense. Recent Accounting Pronouncements. In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update("ASU") No. 2013-2, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income". ASU No. 2013-2 requires disclosure ofamounts reclassified out of accumulated other comprehensive income by component. The adoption of ASU 2013-2 will not materially impact the Company'sconsolidated financial statements and will be effective beginning in 2014. In December 2011, the FASB issued guidance which requires an entity to disclose information about offsetting and related arrangements to enablefinancial statement users to evaluate the effect or potential effect of netting arrangements, including rights of setoff associated with the entity's recognizedfinancial assets and liabilities, on the entity's financial position. The adoption of this guidance will not materially impact the Company's consolidatedfinancial statements and will be effective beginning in 2014.61Table of ContentsNote 3. Balance Sheet Items Inventories Components of inventories were as follows: As of September 28, 2013 September 29, 2012 (In thousands)Raw materials$526,148 $584,821Work-in-process96,482 96,757Finished goods158,930 144,961Total$781,560 $826,539Property, Plant and Equipment, net Property, plant and equipment consisted of the following: As of September 28, 2013 September 29, 2012 (In thousands)Machinery and equipment$1,416,401 $1,424,070Land and buildings564,194 553,143Leasehold improvements54,519 58,197Furniture and fixtures19,088 19,068Construction in progress11,949 45,676 2,066,151 2,100,154Less: Accumulated depreciation and amortization(1,526,000) (1,530,789)Property, plant and equipment, net$540,151 $569,365 Depreciation expense was $94.1 million, $96.3 million, and $100.1 million for 2013, 2012 and 2011, respectively. Warranty Reserve. The following table presents warranty reserve activity: Year Ended September 28, 2013 September 29, 2012 (In thousands)Balance, beginning of the year$14,649 $15,672Additions to accrual9,156 6,716Accrual utilized(8,669) (7,739)Balance, end of the year$15,136 $14,649The warranty reserve is included in accrued liabilities on the consolidated balance sheet.Note 4. Fair ValueFair Value Option for Long-term DebtThe Company has elected not to record its long-term debt instruments at fair value, but has measured them at fair value for disclosure purposes. Asof September 28, 2013, the carrying amount and estimated fair value of the Company's long-term debt instruments were $540.0 million and $567.5 million,respectively. Fair value was estimated based on quoted prices (Level 2 inputs).62Table of ContentsAssets/Liabilities Measured at Fair Value on a Recurring BasisThe Company's primary financial assets and financial liabilities are as follows:•Money market funds•Time deposits•Foreign currency forward contracts•Interest rate swapsAccounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures, defines fair value as the price that would bereceived from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determiningfair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market inwhich it would transact and also considers assumptions that market participants would use when pricing an asset or liability. Inputs to valuation techniques used to measure fair value are prioritized into three broad levels (fair value hierarchy), as follows: Level 1:Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2:Inputs that reflect quoted prices, other than quoted prices included in Level 1, that are observable for the assets or liabilities, such as quotedprices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in less active markets; or inputs thatare derived principally from or corroborated by observable market data by correlation.Level 3:Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of assetsor liabilities.There were no transfers between levels in the fair value hierarchy during any period presented herein. The following table presents information as ofSeptember 28, 2013 with respect to assets and liabilities measured at fair value on a recurring basis: Money market funds Time deposits Derivatives designated ashedging instrumentsunder ASC 815: ForeignCurrency ForwardContracts and InterestRate Swaps Derivatives notdesignated as hedginginstruments under ASC815: Foreign CurrencyForward Contracts andInterest Rate Swaps Total Level 1 Level 1 Level 2 Level 2 (In thousands)Balance Sheet Classification: Cash and cash equivalents $436 $34,569 $— $— $35,005Prepaid expenses and other current assets $— $— $28 $1,105 $1,133Other assets $— $— $22,512 $— $22,512Accrued liabilities (1) $— $— $(32) $(11,371) $(11,403)(1) Liabilities, or credit balances, are presented as negative amounts.63Table of ContentsThe following table presents information as of September 29, 2012 with respect to assets and liabilities measured at fair value on a recurring basis: Money market funds Time deposits Derivatives designated ashedging instrumentsunder ASC 815: ForeignCurrency ForwardContracts and InterestRate Swaps Derivatives notdesignated as hedginginstruments under ASC815: Foreign CurrencyForward Contracts Total Level 1 Level 1 Level 2 Level 2 (In thousands)Balance Sheet Classification: Cash and cash equivalents $435 $3,384 $— $— $3,819Prepaid expenses and other current assets $— $— $77 $1,770 $1,847Other assets $— $— $39,954 $— $39,954Accrued liabilities (1) $— $— $(175) $(2,913) $(3,088)Other long-term liabilities (1) $— $— $(23,126) $— $(23,126)(1) Liabilities, or credit balances, are presented as negative amounts.The Company sponsors deferred compensation plans for eligible employees and non-employee members of its Board of Directors that allowparticipants to defer payment of part or all of their compensation. The Company's results of operations are not significantly affected by these plans sincechanges in the fair value of the assets substantially offset changes in the fair value of the liabilities. As such, assets and liabilities associated with these planshave not been included in the above tables. Assets and liabilities associated with these plans were approximately $11.0 million and $10.0 million as ofSeptember 28, 2013 and September 29, 2012, respectively, and are recorded as other non-current assets and other long-term liabilities on the consolidatedbalance sheet.The Company values derivatives using observable Level 2 market expectations at the measurement date and standard valuation techniques to convertfuture amounts to a single present value amount assuming that participants are motivated, but not compelled, to transact. The Company seeks high qualitycounterparties for all financing arrangements. For interest rate swaps, Level 2 inputs include short-term LIBOR rates, futures contracts on LIBOR between twoand four years, longer term swap rates at commonly quoted intervals, and credit default swap rates for the Company and relevant counterparties. For currencycontracts, Level 2 inputs include foreign currency spot and forward rates and interest rates at commonly quoted intervals. Mid-market pricing is used as apractical expedient for fair value measurements. ASC Topic 820 requires the fair value measurement of an asset or liability to reflect the nonperformance riskof the entity and the counterparty. Therefore, the counterparty's creditworthiness when in an asset position and the Company's creditworthiness when in aliability position have been considered in the fair value measurement of derivative instruments. The effect of nonperformance risk on the fair value ofderivative instruments was not material as of September 28, 2013 and September 29, 2012.Non-Financial Assets Measured at Fair Value on a Nonrecurring BasisAssets held-for-sale, consisting of land and buildings, are measured at fair value on a nonrecurring basis since these assets are subject to fair valueadjustments only when the carrying amount of such assets exceeds the fair value of such assets or such assets have been previously impaired and the fairvalue exceeds the carrying amount by less than the amount of the impairment that has been recognized. Level 2 inputs consist of independent third partyvaluations based on market comparables. The carrying value of the Company's assets held-for-sale was $4.4 million and $10.2 million as of September 28,2013 and September 29, 2012, respectively, and is included in prepaid expenses and other current assets on the consolidated balance sheet. Impairmentcharges of $2.1 million and $2.4 million were recorded in 2013 and 2012, respectively, related to properties held-for-sale.Note 5. Derivative Financial InstrumentsThe Company is exposed to certain risks related to its ongoing business operations. The primary risks managed by using derivative instruments areinterest rate risk and foreign currency exchange risk.64Table of ContentsInterest Rate Risk Interest rate swaps are used to manage interest rate risk associated with borrowings under the Company's long-term debt arrangements.Interest Rate Swaps Not Designated As Hedging InstrumentsThe Company has interest rate swaps with an aggregate notional amount of $257 million that were entered into in 2007 to hedge LIBOR-based variablerate interest payments expected to occur through June 15, 2014. The swap agreements effectively convert variable interest rate obligations to fixed interest rateobligations and were accounted for as cash flow hedges under ASC Topic 815, Derivatives and Hedging. During the first quarter of 2013, the Companydetermined, based on its intention of redeeming $257.4 million of its senior floating rates notes due in 2014 ("2014 Notes"), that it was no longer probable thatLIBOR-based, variable rate interest payments would occur on $257 million of debt through June 15, 2014. Accordingly, the Company dedesignated itsinterest rate swaps in their entirety in the first quarter of 2013 and recorded a charge of $14.9 million to other expense, net, representing the portion of the valueof the interest rate swaps previously recorded in accumulated other comprehensive income (AOCI) for which it was no longer probable that LIBOR-basedvariable rate interest payments would occur. During the second quarter of 2013, the Company redeemed its 2014 Notes in full using a combination of cash onhand and borrowings under the Company's revolving credit facility (LIBOR-based, variable rate facility). Therefore, LIBOR-based variable rate payments areonly expected to occur on forecasted borrowings under the Company's revolving credit facility and only during the period of time these borrowings are expectedto be outstanding. The AOCI balance as of September 28, 2013 related to the swaps was $0.3 million and is expected to be amortized to interest expense overthe next three months.Under the terms of the swap agreements, the Company pays the independent swap counterparties a fixed rate of approximately 5.6% and the swapcounterparties pay the Company an interest rate equal to three-month LIBOR. As of September 28, 2013, the fair value of the interest rate swaps was $9.8million and is included in accrued liabilities on the consolidated balance sheet. The Company does not intend to liquidate the swap agreements and willtherefore continue to make and receive payments under the swaps through June 15, 2014. Beginning on the date the interest rate swaps were dedesignated,changes in the fair value of the interest rate swaps have been recorded to other expense, net, in the consolidated statement of income. Such amounts were notmaterial for 2013.Fair Value HedgeThe Company has $500 million of fixed-rate senior notes outstanding as of September 28, 2013 and has an interest rate swap with a singlecounterparty to hedge its exposure to changes in the fair value of the notes resulting from fluctuations in interest rates. The swap agreement, with a notionalamount of $500 million and an expiration date of May 15, 2019, effectively converts these notes from fixed-rate debt to variable-rate debt. Pursuant to theinterest rate swap, the Company pays the swap counterparty a variable rate equal to the three-month LIBOR plus a spread and receives a fixed rate of 7.0%from the swap counterparty. Consistent with the Company's ability to call the 2019 Notes beginning in May 2014, the swap counterparty has the unilateralright to terminate the swap beginning in May 2014 and pay the Company a market termination fee. In accordance with ASC Topic 815, the interest rate swapis accounted for as a fair value hedge and is exempt from periodic assessment of hedge effectiveness. Therefore, the change in the fair value of the 2019 Notesresulting from changes in interest rates is assumed to be equal and opposite to the change in the fair value of the interest rate swap. As of September 28, 2013,the fair value of the interest rate swap was $22.5 million and is included in other non-current assets and long term debt on the consolidated balance sheet.Foreign Currency Exchange RiskForward contracts on various foreign currencies are used to manage foreign currency risk associated with forecasted non-functional currencytransactions and certain monetary assets and liabilities denominated in non-functional currencies. The Company's primary foreign currency cash flows are incertain Asian and European countries, Israel, Brazil and Mexico.65Table of ContentsThe Company had the following outstanding foreign currency forward contracts that were entered into to hedge foreign currency exposures: As of September 28, 2013 September 29, 2012Derivatives Designated as Accounting Hedges: Notional amount (in thousands)$100,679 $123,050 Number of contracts41 49Derivatives Not Designated as Accounting Hedges: Notional amount (in thousands)$190,226 $292,469 Number of contracts42 33The Company enters into short-term foreign currency forward contracts to hedge currency exposures associated with certain monetary assets andliabilities denominated in non-functional currencies. These contracts have maturities of up to two months and are not designated as accounting hedges underASC Topic 815. Accordingly, these contracts are marked-to-market at the end of each period with unrealized gains and losses recorded in other income(expense), net, in the consolidated statements of income. For the year ended September 28, 2013 and September 29, 2012, the Company recognized a loss of$4.7 million and a gain of $7.4 million, respectively, associated with forward contracts. From an economic perspective, the objective of the Company'shedging program is for gains and losses on forward contracts to substantially offset gains and losses on the underlying hedged items.The Company also utilizes foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreigncurrency exchange rates. Such exposures generally result from 1) forecasted sales denominated in currencies other than those used to pay for materials andlabor and 2) anticipated capital expenditures denominated in a currency other than the functional currency of the entity making the expenditures. Thesecontracts may be up to twelve months in duration and are accounted for as cash flow hedges under ASC Topic 815.For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported asa component of accumulated other comprehensive income (AOCI), an equity account, and reclassified into earnings in the same period or periods duringwhich the hedged transaction affects earnings. Gains and losses on derivative instruments representing hedge ineffectiveness are recognized in current earningsand were not material for any period presented herein. As of September 28, 2013, AOCI related to foreign currency forward contracts was not material.The following table presents the effect of cash flow hedging relationships on the Company's consolidated statement of income for the years endedSeptember 28, 2013 and September 29, 2012, respectively:Derivative Type and Income Statement Location Amount of Gain/(Loss) Recognized inOCI on Derivative(Effective Portion) Amount of Gain (Loss) Reclassifiedfrom Accumulated OCI into Income(Effective Portion) Amount of Gain (Loss) Reclassifiedfrom Accumulated OCI into Income(Ineffective Portion) September 28, 2013 September 29, 2012 September 28, 2013 September 29, 2012 September 28, 2013 September 29, 2012 (In thousands)Interest rate swaps - Other income (expense), net $— $— $— $— $(14,903) $—Interest rate swaps - Interest expense 96 (3,109) (6,587) (12,955) — —Foreign currency forward contracts - Cost of sales 912 588 1,313 645 — —Total $1,008 $(2,521) $(5,274) $(12,310) $(14,903) $—Note 6. Financial Instruments and Concentration of Credit RiskFinancial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, trade accounts receivable, foreignexchange forward contracts, and interest rate swap agreements. The carrying value of assets such as cash, cash equivalents and accounts receivable isexpected to approximate fair value due to the assets short duration. Foreign exchange forward contracts and interest rate swap agreements are recorded on theCompany's balance sheets at fair value. The Company maintains the majority of its cash and cash equivalents with recognized financial institutions thatfollow the Company's investment policy, and has not experienced any significant losses on these investments to date. One of the66Table of ContentsCompany's most significant credit risks is the ultimate realization of accounts receivable. This risk is mitigated by ongoing credit evaluations of, and frequentcontact with, the Company's customers, especially its most significant customers, thus enabling it to monitor changes in business operations and respondaccordingly. The Company generally does not require collateral for sales on credit. The Company considers these concentrations of credit risks whenestimating its allowance for doubtful accounts.One customer represented more than 10% of the Company's net sales in each of 2013 and 2012 and a different customer represented more than 10%of the Company's net sales in 2011. Two customers each represented 10% or more of the Company's gross accounts receivable as of September 28, 2013 andSeptember 29, 2012.Note 7. DebtLong-term debt consisted of the following: As of September 28, 2013 September 29, 2012 (In thousands)Senior Floating Rate Notes due 2014$— $257,410Secured Debt due 201540,000 40,000Senior Notes due 2019500,000 500,000Fair value adjustment (1)22,512 39,954Total long-term debt$562,512 $837,364 (1) Represents fair value hedge accounting balance related to interest rate swaps. See Note 5 for discussion.Senior Notes Due 2019. During 2011, the Company issued $500.0 million aggregate principal amount of senior notes due 2019 (the "2019Notes"). The 2019 Notes mature on May 15, 2019 and bear interest at an annual rate of 7%, payable semi-annually in arrears in cash. As of September 28,2013, unamortized debt issuance costs of $8.3 million are included in other non-current assets on the consolidated balance sheet and are being amortized tointerest expense over the term of the 2019 Notes using the effective interest method.The 2019 Notes are senior unsecured obligations and are fully and unconditionally guaranteed on a senior, unsecured basis by substantially all ofthe Company's domestic subsidiaries. The Company may redeem all or any portion of the 2019 Notes at any time prior to May 15, 2014, at par plus accruedand unpaid interest plus a make-whole premium. The Company may redeem all or any portion of the 2019 Notes beginning on or after May 15, 2014, atredemption prices ranging from 100% to 105.25% of the principal amount, plus accrued and unpaid interest. Following a change of control, as defined, eachholder of the 2019 Notes shall have the right to require the Company to repurchase all or any portion of such holder's 2019 Notes at a purchase price equal to101% of the principal amount, plus accrued and unpaid interest.As discussed in Note 5, the Company entered into an interest rate swap to hedge its exposure to changes in the fair value of the 2019 Notes resultingfrom changes in interest rates. As of September 28, 2013, the fair value hedge accounting adjustment related to the 2019 Notes was $22.5 million and hasbeen recorded as an increase to long-term debt.The indentures for the 2019 Notes provide for customary events of default, including payment defaults, breaches of covenants, certain paymentdefaults at final maturity or acceleration of certain other indebtedness, failure to pay certain judgments, certain events of bankruptcy, insolvency andreorganization and certain instances in which a guarantee ceases to be in full force and effect. If any event of default occurs and is continuing, subject tocertain exceptions, the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding notes may declare all the notes to be due andpayable immediately, together with any accrued and unpaid interest, if any. In the case of an event of default resulting from certain events of bankruptcy,insolvency or reorganization, such amounts with respect to the notes will be due and payable immediately without any declaration or other act on the part of thetrustee or the holders of the notes. Additionally, following a change of control, as defined in the indentures, the Company will be required to make an offer torepurchase all or any portion remaining outstanding of such debt at a purchase price of 101% of the principal amount, plus accrued and unpaid interest.Senior Floating Rate Notes. In 2007, the Company issued $300.0 million of Senior Floating Rate Notes due June 15, 2014. The Companyrepurchased $42.6 million of these notes in 2009 and redeemed the remaining $257.4 million of the67Table of Contentsoutstanding notes during 2013 at par plus accrued interest and incurred a loss of $1.4 million, consisting primarily of the write-off of unamortized debtissuance costs.As discussed in Note 5, the Company has interest rate swap agreements with two independent counterparties to hedge its interest rate exposure on the2014 Notes.Secured Debt. During the fourth quarter of 2012, the Company borrowed $40.0 million using its corporate campus as collateral (the “Secured Debtdue 2015”). The secured debt matures in 2015, bears interest at LIBOR plus a spread or the bank's prime rate plus a spread, includes two one-year renewaloptions subject to bank approval and requires compliance with a fixed charge coverage ratio and customary covenants similar to those of the asset-backedlending facility discussed below. Other than the Company's Secured Debt due 2015, the Company's debt agreements do not contain financial covenants currently applicable to theCompany, but do include a number of restrictive covenants that limit the Company's ability to, among other things: incur additional debt, make investmentsand other restricted payments, pay dividends on capital stock, or redeem or repurchase capital stock or subordinated obligations; create specified liens; sellassets; create or permit restrictions on the ability of its restricted subsidiaries to pay dividends or make other distributions to the Company; engage intransactions with affiliates; incur layered debt; and consolidate or merge with or into other companies or sell all or substantially all of its assets. The restrictedcovenants are subject to a number of important exceptions and qualifications.Maturities of long-term debt as of September 28, 2013 were as follows: (In thousands)2014$—201540,0002016—2017—2018—Thereafter500,000Total$540,000Short-term DebtAsset-backed Lending Facility. In 2009, the Company entered into a Loan, Guaranty and Security Agreement, among the Company, the financialinstitutions party thereto from time to time as lenders, and Bank of America, N.A., as agent for such lenders. During the second quarter of 2012, the Company entered into an Amended and Restated Loan, Guaranty and Security Agreement (the “LoanAgreement”), among the Company, the financial institutions party thereto from time to time as lenders, and Bank of America, N.A., as agent for such lenders.The Loan Agreement amended and restated the Company's existing Loan, Guaranty and Security Agreement. The Company incurred $2.7 million of debtissuance costs in connection with this amendment. Such costs are included in other non-current assets on the consolidated balance sheet and are beingamortized to interest expense over the life of the facility on a straight-line basis.The Loan Agreement provides for a $300 million secured asset-backed revolving credit facility with a $100 million letter of credit sublimit. Thefacility may be increased by an additional $200 million upon obtaining additional commitments from the lenders then party to the Loan Agreement or newlenders. The Loan Agreement expires on March 16, 2017 (the “Maturity Date”). As of September 28, 2013, there were no borrowings outstanding, $23.1million in letters of credit were outstanding and the Company was eligible to borrow $266.4 million. Loans may be advanced under the Loan Agreement based on a borrowing base derived from specified percentages of the value of eligible accountsreceivable and inventory. If at any time the aggregate principal amount of the loans outstanding plus the face amount of undrawn letters of credit under theLoan Agreement exceed the borrowing base then in effect, the Company must make a payment or post cash collateral (in the case of letters of credit) in anamount sufficient to eliminate such excess. 68Table of ContentsLoans under the Loan Agreement bear interest, at the Company's option, at a rate equal to LIBOR or a base rate equal to Bank of America, N.A.'sannounced prime rate, in each case plus a spread. A commitment fee accrues on any unused portion of the commitments under the Loan Agreement at a rateper annum based on usage. Interest on loans is payable quarterly in arrears with respect to base rate loans and at the end of an interest period in the case ofLIBOR loans. Principal, together with accrued and unpaid interest, is due on the Maturity Date. The Company's obligations under the Loan Agreement are secured by (1) all U.S. and Canadian accounts receivable and all supporting obligations,chattel paper, documents and instruments in respect thereof or relating thereto; (2) all U.S. and Canadian deposit accounts (except accounts used forcollections for certain transactions); (3) all U.S. and Canadian inventory; (4) the equity interests of each of the borrowers (except the Company) and theguarantors and the other equity interests owned directly by the borrowers and the guarantors, subject to limited exceptions; (5) all U.S. and Canadianpromissory notes issued by the Designated Canadian Guarantors; (6) all U.S. and Canadian cash in any form; (7) all U.S. and Canadian accessions to,substitutions for, and all replacements, products, and cash and non-cash proceeds of the foregoing; and (8) all U.S. and Canadian books and recordspertaining to the foregoing. The Loan Agreement contains a financial covenant that was not applicable to us as of September 28, 2013, and customary covenants, includingcovenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws andregulations. Further, the Loan Agreement contains customary negative covenants limiting the ability of the Company under certain circumstances, among otherthings, to use the facility to incur debt, make investments, acquisitions and certain restricted payments, and to sell assets. Upon an event of default, thelenders may declare all outstanding principal and accrued but unpaid interest under the Loan Agreement immediately due and payable. Events of default underthe Loan Agreement include payment defaults, cross defaults with certain other indebtedness, breaches of covenants or representations and warranties, changein control of the Company and bankruptcy events. Foreign Short-term Borrowing Facilities. As of September 28, 2013, certain foreign subsidiaries of the Company had a total of $184.0 million ofshort-term borrowing facilities, under which no borrowings were outstanding. The loan agreements contain certain negative covenants that, upon default,permit the bank to deny any further advances or extension of credit or to terminate the loan agreement. These facilities expire at various dates through thesecond quarter of 2015.As of September 28, 2013, the Company was in compliance with all covenants related to its long-term debt instruments, asset backed lendingfacility and short-term debt facilities.Note 8. Commitments and ContingenciesOperating Leases. The Company leases certain of its facilities and equipment under non-cancellable operating leases expiring at various datesthrough 2042. The Company is responsible for utilities, maintenance, insurance and property taxes under these leases. Future minimum lease payments, netof sublease income, under operating leases are as follows: (In thousands)2014$26,020201517,514201611,74520178,98320186,228Thereafter20,597Total$91,087Rent expense, net of sublease income, under operating leases was $33.7 million, $32.9 million and $29.8 million for 2013, 2012 and 2011,respectively. Litigation and other contingencies. From time to time, the Company is a party to litigation, claims and other contingencies, includingenvironmental and employee matters and examinations and investigations by governmental agencies, which arise in the ordinary course of business. TheCompany cannot predict what effect these matters may have on its results of operations, financial condition or cash flows. Refer to “Item 3-Legal Proceedings”.The Company records a contingent liability when it is probable that a loss has been incurred and the amount of loss is reasonably estimable inaccordance with ASC Topic 450, Contingencies or other applicable accounting standards. As of69Table of ContentsSeptember 28, 2013 and September 29, 2012, the Company had accrued liabilities of $22.2 million and $18.5 million, respectively, for environmentalmatters, litigation and other contingencies, excluding reserves for uncertain tax positions, which the Company believes is adequate. Such reserves are includedin accrued liabilities and other long-term liabilities on the consolidated balance sheet.The Company is subject to various federal, state, local and foreign laws and regulations concerning environmental protection, including thoseaddressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the cleanup of contaminatedsites, the materials used in products, and the recycling, treatment and disposal of materials. As of September 28, 2013, the Company had been named in alawsuit alleging certain of its current and former sites contributed to groundwater contamination. Although it is reasonably possible that the Company mayincur a loss in connection with this matter, the amount of loss or range of loss cannot be reasonably estimated.Note 9. Income TaxesDomestic and foreign components of income (loss) before income taxes were as follows: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)Domestic$3,517 $(7,548) $42,136Foreign99,889 57,491 57,402Total$103,406 $49,943 $99,538 The provision for (benefit from) income taxes consists of the following: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)Federal: Current$— $(3,223) $—Deferred(6,611) (154,292) —State: Current1,388 (124) 1,009Deferred(189) (4,408) —Foreign: Current31,249 28,928 31,749Deferred(1,782) 2,828 (2,137)Total provision for (benefit from) income taxes$24,055 $(130,291) $30,62170Table of Contents The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows: As of September 28,2013 September 29,2012 (In thousands)Deferred tax assets: U.S. net operating loss carryforwards$473,025 $472,086Foreign net operating loss carryforwards307,404 298,585Acquisition related intangibles73,205 91,972Accruals not currently deductible50,835 45,102Property, plant and equipment20,557 26,906Tax credit carryforwards24,330 24,478Reserves not currently deductible22,588 24,209Stock compensation expense13,970 14,664Unrealized losses on derivative financial instruments4,437 14,089Other132 550Valuation allowance(788,260) (819,527)Total deferred tax assets202,223 193,114Deferred tax liabilities on foreign earnings(19,873) (20,540)Other deferred tax liabilities(1,195) —Net deferred tax assets$181,155 $172,574Recorded as: Current deferred tax assets$23,276 $19,721Non-current deferred tax assets157,879 152,853Net deferred tax assets$181,155 $172,574 Certain prior period amounts in the table above have been revised to conform to the current period's presentation. The revisions primarily relate to areclassification between foreign net operating loss carryforwards and the associated full valuation allowance. This change in presentation only affects the grossdeferred tax assets disclosed in the table above and had no effect on net deferred tax assets as of September 29, 2012.The Company offsets current deferred tax assets and liabilities and non-current deferred tax assets and liabilities by tax-paying jurisdiction. Theresulting net amounts by tax jurisdiction are then aggregated without further offset.Prior to 2012, based on historical evidence (primarily cumulative losses), the Company had a valuation allowance against certain deferred tax assetsin the U.S. and foreign jurisdictions. A valuation allowance is required to be established or maintained when, based on currently available information andother factors, it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company assesses its valuation allowance againstdeferred tax assets on a regular and periodic basis. The Company considers all available positive and negative evidence, including future reversals oftemporary differences, projected future taxable income, tax planning strategies and recent financial results. During the fourth quarters of 2013 and 2012, theCompany concluded that it was more likely than not that it would be able to realize the benefit of a portion of its deferred tax assets in the future. TheCompany based this conclusion on recent historical book and taxable income, recent global restructuring actions and projections of future operating income.As a result, the Company released $21.5 million and $158.7 million during 2013 and 2012, respectively, of the valuation allowance attributable to certainU.S. and foreign deferred tax assets and net operating losses.As of September 28, 2013, U.S. income taxes have not been provided for approximately $502.5 million of cumulative undistributed earnings ofseveral non-U.S. subsidiaries. The Company intends to reinvest these earnings indefinitely in operations outside of the U.S. Determination of the amount ofunrecognized deferred tax liabilities on these undistributed earnings is not practicable. As of September 28, 2013, the Company has cumulative net operating loss carryforwards for federal, state and foreign tax purposes of $1,257.9million, $923.8 million and $1,201.2 million, respectively. The federal and state net operating loss71Table of Contentscarryforwards begin expiring in 2023 and 2014, respectively, and expire at various dates through 2029. Certain foreign net operating losses start expiring in2014. However, the majority of foreign net operating losses carryforward indefinitely. The Tax Reform Act of 1986 and similar state provisions imposerestrictions on the utilization of net operating loss and tax credit carryforwards in the event of an “ownership change” as defined in the Internal Revenue Code.As of September 28, 2013, the Company had $6.8 million of federal net operating losses subject to an annual limitation and may utilize approximately $1.7million of these net operating losses each year. Additionally, the utilization of certain foreign net operating losses may be restricted due to changes in ownershipand business operations. The Company has been granted tax holidays for certain of its subsidiaries in Thailand, China and India. Tax benefits arising from these taxholidays were $1.5 million for 2013 ($0.02 per diluted shares), $3.1 million for 2012 ($0.04 per diluted share) and $3.6 million for 2011 ($0.04 per dilutedshare). The Company's tax holiday in Singapore expired in 2012 and tax holidays in the other countries expire through 2019, excluding potential renewals,and are subject to certain conditions with which the Company expects to comply. Following is a reconciliation of the statutory federal tax rate to the Company's effective tax rate: Year Ended September 28, 2013 September 29, 2012 October 1, 2011Federal tax at statutory rate35.00 % 35.00 % 35.00 %Effect of foreign operations(8.17) 21.73 9.57Foreign income inclusion4.08 10.48 0.25Change in valuation allowance11.54 (6.74) (16.97)Permanent items0.26 3.11 1.90Change to other comprehensive income— (6.64) —Release of valuation allowance(20.79) (317.76) —State income taxes, net of federal benefit1.34 (0.06) 1.01Effective tax rate23.26 % (260.88)% 30.76 %A reconciliation of the beginning and ending amount of total unrecognized tax benefits, excluding accrued penalties and interest, is as follows: Year Ended September 28, 2013 September 29, 2012 (In thousands)Balance, beginning of year$54,224 $41,482Increase related to prior year tax positions13,238 10,125Decrease related to prior year tax positions(5,672) (320)Increase related to current year tax positions3,358 3,133Settlement— (196)Balance, end of year$65,148 $54,224 Total unrecognized tax benefits as of September 28, 2013 include $1.9 million that has been netted against deferred tax assets. The remaining $63.2million unrecognized tax benefit, if recognized, would affect the effective tax rate on income. As of September 28, 2013, the Company had reserves of $27.1 million for the payment of interest and penalties relating to unrecognized tax benefits.The Company accrued interest and penalties related to unrecognized tax benefits of $1.9 million in 2013, $5.6 million in 2012, and $2.7 million in 2011.The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.The Company conducts business globally and, as a result, files income tax returns in the United States federal jurisdiction and various state andforeign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company iscurrently being audited by the Internal Revenue Service for tax years 2008 through 2010. To the extent the final tax liabilities are different from the amountsaccrued, this would result in an increase or decrease in net operating losses and would not have an impact on the consolidated financial statements.Additionally, the Company is being audited by various state tax agencies and certain foreign countries. To the extent the final72Table of Contentstax liabilities are different from the amounts accrued, the increases or decreases would be recorded as income tax expense or benefit in the consolidatedstatements of income. Although the Company believes that the resolution of these audits will not have a material adverse impact on the Company’s results ofoperations, the outcome is subject to uncertainty.In general, the Company is no longer subject to United States federal or state income tax examinations for years before 2003, and to foreignexaminations for years prior to 2003 in its major foreign jurisdictions. Although the timing of the resolution of audits is highly uncertain, it is reasonablypossible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years subject toaudit and the number of matters being examined, the Company is unable to estimate the full range of possible adjustments to the balance of gross unrecognizedtax benefits.Note 10. Restructuring CostsRestructuring Plans - 2012In 2012, the Company initiated restructuring plans related to four plant closures and business reorganizations. Costs associated with these plans areexpected to be $29.8 million and to include employee severance, costs related to facilities, asset impairment charges and other exit costs. In connection withactions taken to date under these plans, the Company has recorded employee termination benefits of $14.1 million for 2,150 employees, $9.9 million of costsrelated to facilities and $4.5 million of asset impairment charges. These plans are expected to be completed within the next six months. As of September 28,2013, $0.7 million of severance remains payable and is expected to be paid in early 2014.Restructuring Plans — Prior to 2012Due to completion of all actions under restructuring plans initiated prior to 2012 and immateriality of the remaining accrual balance related to suchplans, these plans have been combined for disclosure purposes. The Company expects to pay the majority of accrued restructuring costs by the end of 2015.In connection with these plans, the Company expects to incur restructuring costs in future periods associated primarily with former sites for which theCompany is or may be responsible for environmental remediation and vacant facilities. Costs incurred with respect to vacant facilities consist primarily of 1)costs to maintain vacant facilities that are owned until such facilities can be sold and 2) the portion of the Company's lease payments and operating costs thathave not been recovered due to the absence of sublease income for vacant leased properties.73Table of ContentsBelow is a summary of restructuring costs associated with facility closures and other consolidation efforts: 2012 RestructuringPlan Prior to 2012Restructuring Plans Total (In thousands)Accrual balance at October 2, 2010$— $6,532 $6,532Employee severance and benefits— 9,041 9,041Leases and facilities shutdown costs— 19,683 19,683Non-cash charges— 5,725 5,725Cash paid for employee terminations— (8,144) (8,144)Cash paid for leases and facilities shutdown costs— (19,369) (19,369)Non-cash charges— (5,725) (5,725)Accrual balance at October 1, 2011— 7,743 7,743Employee severance and benefits11,618 827 12,445Leases and facilities shutdown costs545 14,465 15,010Non-cash charges3,482 3,396 6,878Cash paid for employee terminations(1,317) (5,776) (7,093)Cash paid for leases and facilities shutdown costs(545) (12,568) (13,113)Non-cash charges(3,482) (3,396) (6,878)Accrual balance at September 29, 201210,301 4,691 14,992Employee severance and benefits2,426 358 2,784Leases and facilities shutdown costs7,562 10,223 17,785Non-cash charges2,773 1,568 4,341Cash paid for employee terminations(12,041) (573) (12,614)Cash paid for leases and facilities shutdown costs(7,566) (9,103) (16,669)Non-cash charges(2,773) (1,568) (4,341)Accrual balance at September 28, 2013$682 $5,596 $6,278 The Company's IMS segment incurred restructuring costs under all restructuring plans of $11.9 million, $19.0 million and $14.2 million for 2013,2012 and 2011, respectively.74Table of ContentsNote 11. Earnings Per ShareBasic and diluted earnings per share are calculated by dividing net income by the weighted average number of shares of common stock outstandingduring the period, as follows: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands, except per share amounts)Numerator: Net income$79,351 $180,234 $68,917 Denominator: Weighted average shares used in computing per share amount: Basic82,834 81,284 80,345Diluted85,403 83,495 83,158 Net income per share: Basic$0.96 $2.22 $0.86Diluted$0.93 $2.16 $0.83 The following table presents weighted-average dilutive securities that were excluded from the above calculation because their inclusion would havehad an anti-dilutive effect under ASC Topic 260, Earnings per Share, due to application of the treasury stock method: As of September 28, 2013 September 29, 2012 October 1, 2011Potentially dilutive securities:(In thousands)Employee stock options6,634 7,937 6,839Restricted stock units— 369 241Total6,634 8,306 7,080Note 12. Stock-Based CompensationStock compensation expense was attributable to: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)Stock options$10,506 $10,084 $13,293Restricted stock units7,018 7,915 5,603Total$17,524 $17,999 $18,89675Table of ContentsStock-based compensation expense was as follows: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)Cost of sales$5,464 $4,504 $4,730Selling, general & administrative11,942 13,363 13,070Research & development118 132 182Restructuring— — 914Total$17,524 $17,999 $18,896Stock Options The Company's stock option plans provide employees the right to purchase common stock at the fair market value of such shares on the grant date.The Company recognizes compensation expense for such awards over the vesting period, which is generally four to five years. The contractual term of alloptions is ten years. The Company recognizes compensation expense ratably over the service period. Assumptions used to estimate the fair value of stock options granted were as follows: Year Ended September 28, 2013 September 29, 2012 October 1, 2011Volatility86.0% 85.8% 84.8%Risk-free interest rate0.7% 0.9% 1.6%Dividend yield— — —Expected life of options5.0 5.0 5.076Table of ContentsStock option activity was as follows: Number of Shares Weighted-AverageExercise Price($) Weighted-AverageRemainingContractual Term(Years) Aggregate IntrinsicValue of In-The-Money Options($) (In thousands) (In thousands)Outstanding, October 2, 201011,078 14.39 7.44 35,417Granted1,875 13.15 Exercised/Cancelled/Forfeited/Expired(2,031) 16.18 Outstanding, October 1, 201110,922 13.85 6.89 14,195Granted1,775 9.61 Exercised/Cancelled/Forfeited/Expired(1,422) 14.08 Outstanding, September 29, 201211,275 13.15 6.54 18,548Granted975 8.83 Exercised/Cancelled/Forfeited/Expired(2,688) 13.36 Outstanding, September 28, 20139,562 12.65 5.99 62,825Vested and expected to vest, September 28, 20139,287 12.73 5.91 60,697Exercisable, September 28, 20137,180 13.49 5.18 45,128 The weighted-average grant date fair value of stock options granted during 2013, 2012 and 2011 was $5.91, $6.44, and $8.66, respectively. Theaggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value of in-the-money options that would have been received by the optionholders had all option holders exercised their options at the Company's closing stock price on the date indicated. The total intrinsic value of stock optionsexercised was $12.1 million for 2013 and was insignificant for 2012 and 2011. As of September 28, 2013, unrecognized compensation expense of $14.3 million is expected to be recognized over a weighted average period of2.4 years. Restricted Stock Units The Company issues restricted stock units to executive officers, directors and certain management employees. These units vest over periods rangingfrom one to four years and are automatically exchanged for shares of common stock at the vesting date. Compensation expense associated with these units isrecognized ratably over the vesting period. Activity with respect to the Company's restricted stock units was as follows: Number of Shares Weighted Grant-Date Fair Value PerShare($) Weighted-AverageRemainingContractual Term(Years) Aggregate IntrinsicValue($) (In thousands) (In thousands)Outstanding, October 2, 2010938 9.78 2.12 10,200Granted1,317 12.69 Vested/Cancelled(417) 11.87 Outstanding, October 1, 20111,838 11.42 1.63 14,249Granted790 6.16 Vested/Cancelled(398) 11.69 Outstanding, September 29, 20122,230 9.51 1.08 21,272Granted1,167 9.42 Vested/Cancelled(1,629) 7.93 Outstanding, September 28, 20131,768 10.90 2.02 31,052Expected to vest, September 28, 20131,210 11.52 1.58 21,245 77Table of ContentsThe weighted-average grant date fair value of restricted stock units granted was $9.42, $6.16 and $12.69 in 2013, 2012 and 2011, respectively.The total fair value of restricted stock units vested was $8.3 million for 2013 and was insignificant for 2012 and 2011. As of September 28, 2013,unrecognized compensation expense of $9.6 million is expected to be recognized over a weighted average period of 1.6 years. Additionally, as of September 28,2013, unrecognized compensation expense related to performance based restricted stock units was $2.6 million. No expense has been recorded for theseperformance based restricted stock units to date as achievement of performance criteria is not considered probable.Note 13. Stockholders' EquityIn 2009, the Company's stockholders approved the 2009 Incentive Plan (“2009 Plan”) and the reservation of 7.5 million shares of common stock forissuance thereunder, which was subsequently increased to 16.4 million shares. The 2009 Plan provides for the grant of incentive stock options, non-statutorystock options, restricted stock, restricted stock units, stock appreciation rights, performance units, and performance shares. The per share exercise price forshares to be issued pursuant to exercise of an option must be no less than 100% of the fair market value per share on the date of grant.Upon approval of the 2009 Plan, all of the Company's other stock plans were terminated as to future grants. Although these plans have beenterminated, they will continue to govern all awards granted under them until the expiration of the awards.As of September 28, 2013, an aggregate of 14.8 million shares were authorized for future issuance under the Company's stock plans, of which 11.3million of such shares were issuable upon exercise of outstanding options and delivery of shares upon vesting of restricted stock units and 3.5 million sharesof common stock were available for future grant. Awards other than stock options and stock appreciation rights reduce common stock available for grant by1.36 shares for every share of common stock subject to such an award. Awards under the 2009 plan that expire or are cancelled without delivery of sharesgenerally become available for issuance under the plan.During the second quarter of 2013, the Company's Board of Directors authorized the Company to repurchase up to $100 million of the Company'scommon stock in the open market or in negotiated transactions off the market. The common stock repurchase program has no expiration date and nopurchases have been made through September 28, 2013.Stock option activity under the Company's option plans during 2013, 2012 and 2011 is disclosed in Note 12. Stock-Based Compensation. The following table summarizes information regarding stock options outstanding at September 28, 2013: Options Outstanding Options Vested and ExercisableRange of Weighted Exercise Prices NumberOutstanding Weighted AverageRemainingContractual Life (Years) Weighted AverageExercise Price($) Number Exercisable Weighted AverageExercise Price($) (In thousands) (In thousands) $1.50-$7.78 1,768 5.74 3.78 1,729 3.70$7.79-$8.77 1,739 8.20 8.57 473 8.60$8.78-$10.76 1,764 7.03 9.51 1,216 9.10$10.77-$15.91 1,976 6.40 13.23 1,466 13.07$15.92-$21.06 131 6.09 17.71 111 17.82$21.07-$21.12 1,361 3.65 21.12 1,362 21.12$21.13-$83.10 823 2.45 30.86 823 30.86$1.50-$83.10 9,562 5.99 12.65 7,180 13.4978Table of ContentsAccumulated Other Comprehensive Income. Accumulated other comprehensive income, net of tax as applicable, consisted of the following: As of September 28, 2013 September 29, 2012 (In thousands)Foreign currency translation adjustments$104,648 $107,720Unrealized holding losses on derivative financial instruments (1)(4,325) (25,510)Unrecognized net actuarial loss and unrecognized transition cost(16,022) (18,731)Total$84,301 $63,479(1) The net unrealized loss on derivative financial instruments is primarily related to interest rate swap agreements associated with certain debt. See Note 5 fordiscussion of change in balance from September 29, 2012. Such amounts are net of an income tax effect of $3.3 million in both periods.Note 14. Other Income (Expense), NetThe following table summarizes the major components of other income (expense), net (in thousands): Year ended September 28, 2013 September 29, 2012 October 1, 2011Foreign exchange gains (losses)$(3,091) $(4,144) $435Loss from dedesignation of interest rate swap (1)(14,903) — —Other, net5,162 3,853 457Total$(12,832) $(291) $892 (1) Represents loss from dedesignation of interest rate swaps associated with variable-rate debt. Refer to Note 5 for further discussion.The Company reduces its exposure to currency fluctuations through the use of foreign currency hedging instruments, however, hedges areestablished based on forecasts of foreign currency balances. To the extent actual amounts differ from forecasted amounts, the Company will have exposure tocurrency fluctuations, resulting in foreign exchange gains or losses.Note 15. Employee Benefit PlansThe Company has various defined contribution retirement plans that cover the majority of its domestic employees. These retirement plans permitparticipants to elect to have contributions made to the retirement plans in the form of salary deferrals. Under these retirement plans, the Company may match aportion of employee contributions. Amounts contributed by the Company were immaterial in 2013 and none in 2012 and 2011. The Company sponsors deferred compensation plans for eligible employees and non-employee members of its board of directors. These plans alloweligible participants to defer payment of all or part of their compensation. Deferrals under these plans were $1.6 million and $1.2 million for 2013 and 2012,respectively. Assets and liabilities associated with these plans were approximately $11.0 million and $10.0 million, as of September 28, 2013 andSeptember 29, 2012, respectively, and are recorded in other non-current assets and other long-term liabilities on the consolidated balance sheets. Defined benefit plans covering certain employees in the United States and Canada were frozen in 2001. Employees who had not yet vested willcontinue to be credited with service until vesting occurs, but no additional benefits will accrue. The Company also provides defined benefit pension plans in certain other countries. The assumptions used for calculating the obligation for non-U.S. plans depend on the local economic environment and regulations. The measurement date for the Company's pension plans is September 28, 2013. 79Table of ContentsChanges in benefit obligations for the plans described above were as follows (in thousands): As of September 28, 2013 As of September 29, 2012 As of October 1, 2011Change in Benefit Obligations U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.Beginning projected benefit obligation $29,601 $35,171 $26,885 $25,396 $27,302 $29,346Service cost — 1,144 — 666 — 599Interest cost 791 1,721 1,027 1,388 1,050 1,382Actuarial (gain) loss (2,050) 3,561 4,121 9,729 656 (5,891)Benefits paid (674) (1,083) (2,432) (722) (2,123) (723)Other (1) (966) 4,076 — (1,286) — 683Ending projected benefit obligation $26,702 $44,590 $29,601 $35,171 $26,885 $25,396 Ending accumulated benefit obligation $26,702 $40,072 $29,601 $31,917 $26,885 $23,374 (1)Related to miscellaneous items such as settlements, curtailments, foreign exchange movements, etc. Weighted-average actuarial assumptions used to determine benefit obligations were as follows: U.S. Pensions Non-U.S. Pensions As of As of September 28, 2013 September 29, 2012 September 28, 2013 September 29, 2012Discount rate3.78% 2.75% 4.14% 4.39%Rate of compensation increases—% —% 3.29% 0.97% The Company evaluates these assumptions on a regular basis taking into consideration current market conditions and historical market data. Thediscount rate is used to measure expected future cash flows at present value on the measurement date. This rate represents the market rate for high-quality fixedincome investments. A lower discount rate would increase the present value of the benefit obligation. Other assumptions include demographic factors such asretirement, mortality, and turnover. Changes in plan assets and funded status for the plans described above were as follows (in thousands): As of September 28, 2013 As of September 29, 2012 As of October 1, 2011Change in Plan Assets U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.Beginning fair value $20,443 $24,853 $18,809 $26,087 $19,216 $26,771Actual return 1,964 1,239 2,466 1,144 892 1,249Employer contributions — 589 1,600 295 824 294Benefits paid (674) (1,083) (2,432) (722) (2,123) (723)Actuarial gain (loss) — 1,397 — (463) — (1,533)Settlement (966) — — — — —Foreign currency exchange rate differences — 1,260 — (1,488) — 29Ending fair value $20,767 $28,255 $20,443 $24,853 $18,809 $26,087Over (under) Funded Status $(5,935) $(16,335) $(9,158) $(10,318) $(8,076) $69180Table of ContentsWeighted-average asset allocations by asset category for the U.S. and non-U.S. plans were as follows: U.S. Non-U.S. Level 1 Level 1 As of As of Target September 28, 2013 September 29,2012 Target September 28, 2013 September 29,2012Equity securities51% 52.0% 52.6% 20% 25.2% 25.2%Debt securities49% 46.3% 47.4% 80% 69.8% 73.4%Cash—% 1.7% —% —% 5.0% 1.4%Total100% 100% 100% 100% 100% 100% The Company's investment strategy is designed to ensure that sufficient pension assets are available to pay benefits as they become due. In order tomeet this objective, the Company has established targeted investment allocation percentages for equity and debt securities as noted in the preceding table. As ofSeptember 28, 2013, U.S. plan assets are invested in the following SEC registered mutual funds: SEI Core Fixed Income Fund, S&P 500 Index Fund, SEIWorld Equity ex-US Fund, SEI Extended Market Index Fund, SEI High Yield Bond Fund and SEI Emerging Market Debt Fund. These mutual funds arevalued based on the net asset value (NAV) of the underlying securities in an active market, which is considered a Level 1 input under ASC Topic 820, FairValue Measurements and Disclosures (refer to Note 5). The beneficial interest of each participant is represented in units which are issued and redeemeddaily at the fund's closing NAV. Non-U.S. plan assets are invested in publicly-traded mutual funds consisting of medium-term Euro bonds and stocks ofcompanies in the European region. The mutual funds are valued using the NAV that is quoted in an active market and is considered a Level 1 input underASC Topic 820. The plans are managed consistent with regulations or market practice of the country in which the assets are invested. As of September 28,2013 there were no significant concentrations of credit risk related to pension plan assets.The funded status of the plans, reconciled to the amount reported on the consolidated balance sheets, is as follows (in thousands): As of September 28, 2013 As of September 29, 2012 As of October 1, 2011 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.Over (under) Funded Status at Year End $(5,935) $(16,335) $(9,158) $(10,318) $(8,076) $691Unrecognized transition obligation — 32 — 55 — 76Unrecognized net actuarial (gain) loss 6,151 10,381 10,674 8,631 9,822 (1,706)Net amount recognized in Consolidated BalanceSheet $216 $(5,922) $1,516 $(1,632) $1,746 $(939)Components of Net Amount Recognized inConsolidated Balance Sheet: Non-current assets $— $— $— $— $— $4,412Current liabilities — (615) — (395) — (286)Non-current liabilities (5,935) (15,720) (9,158) (9,923) (8,076) (3,435)Accumulated other comprehensive income 6,151 10,413 10,674 8,686 9,822 (1,630)Net asset (liability) recognized in ConsolidatedBalance Sheet $216 $(5,922) $1,516 $(1,632) $1,746 $(939)Estimated amortization from accumulated other comprehensive income into net periodic benefit cost in 2014 is as follows (in thousands): U.S. Non-U.S.Amortization of actuarial loss$438 $488Amortization of transition obligation— 23Total$438 $511 81Table of ContentsComponents of net periodic benefit costs were as follows (in thousands): As of September 28, 2013 As of September 29, 2012 As of October 1, 2011 U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.Service cost $— $1,144 $— $666 $— $599Interest cost 791 1,721 1,027 1,388 1,050 1,382Return on plan assets (785) (1,238) (784) (1,145) (1,162) (1,249)Settlement charge 223 — 635 — 532 —Amortization of: Actuarial loss 1,071 358 951 26 1,000 78Transition obligation — 23 — 23 — 23Net periodic benefit cost $1,300 $2,008 $1,829 $958 $1,420 $833Weighted-average assumptions used to determine benefit costs were as follows: U.S. Pensions Non-U.S. Pensions As of As of September 28, 2013 September 29, 2012 September 28, 2013 September 29, 2012Discount rate2.75% 4.00% 4.39% 5.80%Expected return on plan assets4.00% 4.25% 3.50% 4.80%Rate of compensation increases—% —% 0.97% 0.82%The expected long-term rate of return on assets for the U.S. and non-U.S. pension plans used in these calculations is assumed to be 4.00% and3.50%, respectively. Several factors, including historical rates of returns, expectations of future returns for each major asset class in which the plan invests,the weight of each asset class in the target mix, the correlations between asset classes and their expected volatilities are considered in developing the asset returnassumptions. Estimated future benefit payments are as follows: Pension Benefits (In thousands)2014$7,1232015$3,8602016$3,8432017$3,8062018$4,113Years 2019 through 2022$21,63982Table of ContentsNote 16. Business Segment, Geographic and Customer InformationASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments, products and services, geographicareas of operations and major customers. Operating segments are defined as components of an enterprise for which separate financial information is availableand evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance.The Company's operations are managed as two businesses:1)Integrated Manufacturing Solutions (IMS). IMS is a reportable segment consisting of printed circuit board assembly and test, final systemassembly and test, and direct order fulfillment.2)Components, Products and Services (CPS). Components include interconnect systems (printed circuit board fabrication, backplane and cableassemblies) and mechanical systems (enclosures, precision machining and plastic injection molding); Products include memory and solidstate drive products from Viking Technology, defense and aerospace products from SCI Technology, storage products from Newisys andoptical and RF (Radio Frequency) modules; and Services include design, engineering, logistics and repair services.The Company evaluated its operating segments to determine whether they can be aggregated into reportable segments. Factors considered in thisevaluation were similarity regarding economic characteristics, products, production processes, type or classes of customers, distribution methods andregulatory environments. Based on this evaluation, the Company determined that it has only one reportable segment - IMS, which generated 80% of theCompany's total revenue in 2013. The Company's CPS business consists of multiple operating segments which do not meet the quantitative threshold forbeing presented as reportable segments. Therefore, financial information for these operating segments is presented in a single category entitled “Components,Products and Services (CPS)”.The accounting policies for each segment are the same as those disclosed by the Company for its consolidated financial statements. Intersegmentsales consist primarily of sales of components to IMS. Effective in the fourth quarter of 2013, the Optical and RF modules group was moved to CPS(previously included in IMS). The Optical and RF modules group offers customers engineering solutions and product designs, including joint product designservices with customers. As a result, this group creates intellectual property that can be used in proprietary designs and products similar to the other productbusinesses in CPS. Accordingly, the results presented below reflect the change in segment reporting for all periods presented to conform to the current periodsegment reporting structure. The change in segment reporting does not affect the Company’s previously reported consolidated financial statements.The Company's chief operating decision maker is the Chief Executive Officer and Chief Financial Officer and they allocate resources and assessperformance of operating segments based on a non-GAAP measure of revenue and gross profit that excludes items not directly related to the Company'songoing business operations. These items are typically either non-recurring or non-cash in nature.83Table of ContentsThe following table presents information for the following years: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)Gross sales: IMS$4,766,670 $4,968,983 $5,337,488CPS1,335,510 1,265,855 1,418,013Intersegment revenue(185,056) (141,504) (153,090) Net Sales$5,917,124 $6,093,334 $6,602,411 Gross Profit: IMS$291,664 $329,267 $376,393 CPS144,725 111,448 136,224 Total436,389 440,715 512,617 Unallocated items (1)(9,572) (4,933) (2,266) Total$426,817 $435,782 $510,351 Depreciation and amortization: IMS$54,531 $54,711 $56,827CPS32,802 35,641 34,622Total87,333 90,352 91,449Unallocated corporate items (2)8,688 9,125 13,122Total$96,021 $99,477 $104,571 Capital expenditures: IMS$44,080 $39,962 $57,478CPS25,542 40,150 36,844Total69,622 80,112 94,322Unallocated corporate items (2)3,447 1,787 3,751Total$73,069 $81,899 $98,073(1) Represents amounts associated with items that management excludes from its measure of gross profit. These items include stock-based compensationexpense, amortization of intangible assets, charges or credits resulting from distressed customers and similar items that either occur infrequently or are of anon-operational nature.(2) Primarily related to selling, general and administration functions. As of September 28, 2013 September 29, 2012 (In thousands)Long-lived assets (including assets held for sale): IMS$287,907 $304,442CPS204,905 220,789Total492,812 525,231Unallocated corporate items (1)51,722 54,346Total$544,534 $579,577(1) Primarily related to selling, general and administration functions.84Table of ContentsInformation by geographic segment, determined based on the country in which a product is manufactured or a service is provided, was as follows: Year Ended September 28, 2013 September 29, 2012 October 1, 2011 (In thousands)Net sales: Domestic$1,074,529 $1,106,446 $1,199,077Mexico1,433,799 1,296,690 1,273,583China1,501,632 1,667,095 1,792,933Other international1,907,164 2,023,103 2,336,818Total$5,917,124 $6,093,334 $6,602,411 Percentage of net sales represented by ten largest customers50.3% 49.7% 49.9%Number of customers representing 10 % or more of net sales1 1 1 As of September 28, 2013 September 29, 2012 (In thousands)Long-lived assets (including assets held for sale): Domestic$147,773 $163,443Mexico125,552 119,032China88,160 89,175Other international183,049 207,927 Total$544,534 $579,57785Table of ContentsItem 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None.Item 9A. Controls and Procedures(a) Management's Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f)under the Securities Exchange Act of 1934, as amended, or the Exchange Act). Our management, including our Chief Executive Officer and Chief FinancialOfficer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 28, 2013. In making this assessment, ourmanagement used the criteria established in Internal Control-Integrated Framework, issued by The Committee of Sponsoring Organizations of theTreadway Commission (COSO) in 1992. Our management has concluded that, as of September 28, 2013, our internal control over financial reporting waseffective based on the COSO criteria. The effectiveness of our internal control over financial reporting as of September 28, 2013 has been audited byKPMG LLP, an independent registered public accounting firm, as stated in their report which is included in Item 8 of this Annual Report on Form 10-K. (b) Changes in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the ExchangeAct) that occurred during the quarter ended September 28, 2013 that have materially affected, or are reasonably likely to materially affect, our internal controlover financial reporting. (c) Evaluation of Disclosure Controls and ProceduresOur management is responsible for establishing and maintaining our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e)under the Exchange Act. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls andprocedures will prevent all error and all fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable,not absolute, assurance that their objectives are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resourceconstraints, and the benefits of disclosure controls and procedures must be considered relative to their costs. Because of the inherent limitations in all controlsystems, no evaluation of disclosure controls and procedures can provide absolute assurance that all disclosure control issues and instances of fraud, if any,have been detected. Nonetheless, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 28, 2013, (1) our disclosurecontrols and procedures were designed to provide reasonable assurance of achieving their objectives and (2) our disclosure controls and procedures wereeffective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded,processed, summarized and reported as and when required, and that such information is accumulated and communicated to our management, including theChief Executive Officer and Chief Financial Officer, to allow timely decisions regarding its required disclosure. Item 9B. Other Information None.86Table of ContentsPART III The information called for by Items 10, 11, 12, 13 and 14 of Part III are incorporated by reference from our definitive Proxy Statement to be filed inconnection with our 2014 Annual Meeting of Stockholders pursuant to Regulation 14A, except that the information regarding our executive officers called forby Item 401(b) of Regulation S-K has been included in Part I of this report.87Table of ContentsPART IV Item 15. Exhibits and Financial Statement Schedules (a)(1)Financial Statements. The following financial statements are filed under Item 8 hereof as part of this report: PageReport of Independent Registered Public Accounting Firm 52Financial Statements: Consolidated Balance Sheets, As of September 28, 2013 and September 29, 2012 53Consolidated Statements of Income, Years Ended September 28, 2013, September 29, 2012 and October 1, 2011 54Consolidated Statements of Comprehensive Income, Years Ended September 28, 2013, September 29, 2012 and October 1, 2011 55Consolidated Statements of Stockholders' Equity, Years Ended September 28, 2013, September 29, 2012 and October 1, 2011 56Consolidated Statements of Cash Flows, Years Ended September 28, 2013, September 29, 2012 and October 1, 2011 57Notes to Consolidated Financial Statements 58 (2)Financial Statement Schedules. The following financial statement schedule of Sanmina Corporation is filed aspart of this report on Form 10-K immediately after the signature pages hereto and should be read in conjunction withour Financial Statements included in this Item 15: Schedule II-Valuation and Qualifying Accounts All other schedules are omitted because they are not applicable or the required information is shown in the FinancialStatements or the notes thereto. (3)Exhibits. Refer to Item 15(b) immediately below.88Table of Contents(b)Exhibits ExhibitNumber Description 3.1(1) Restated Certificate of Incorporation of the Registrant, dated January 31, 1996.3.2(2) Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant, dated March 9, 2001.3.3(3) Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of the Registrant, datedMay 31, 2001.3.4(4) Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant, dated December 7, 2001.3.5(5) Amended and Restated Bylaws of the Registrant adopted by the Board of Directors on December 1, 2008.3.6(6) Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant, as amended, dated July 27, 2009.3.7 Certificate of Ownership and Merger as filed with the Secretary of State of the State of Delaware and effective November 15, 2012(filed herewith).4.1 (removed and reserved)4.2(7) (removed and reserved)4.3(8) (removed and reserved)4.4(9) (removed and reserved)4.5 (removed and reserved)4.6(10) (removed and reserved)4.7(11) (removed and reserved)4.8(12) (removed and reserved)4.9(13) (removed and reserved)4.10(14) (removed and reserved)4.11(15) Indenture, dated as of May 10, 2011, among Sanmina-SCI Corporation, certain subsidiaries of Sanmina-SCI Corporation, asguarantors, and U.S. Bank National Association, as trustee.4.12(15) Form of Note for Sanmina-SCI Corporation's 7% Senior Notes due 2019.4.13(15) (removed and reserved)10.1 (removed and reserved)10.2(16)(17) 1999 Stock Plan.10.3(18) Addendum to the 1999 Stock Plan (Additional Terms and Conditions for Employees of the French subsidiary(ies)), datedFebruary 21, 2001.10.4(19) 1995 Director Option Plan.10.5 (removed and reserved)10.6 (removed and reserved)10.7 (removed and reserved)10.8(20) SCI Systems, Inc. 2000 Stock Incentive Plan.10.9(21) SCI Systems, Inc. Board of Directors Deferred Compensation Plan.10.10(22) Form of Indemnification Agreement executed by the Registrant and its officers and directors pursuant to the Delaware reincorporation.10.11(23)(17) Amended and Restated Sanmina-SCI Corporation Deferred Compensation Plan for Outside Directors.10.12(24) Rules of the Sanmina-SCI Corporation Stock Option Plan 2000 (Sweden).10.13(25) Rules of the Sanmina-SCI Corporation Stock Option Plan 2000 (Finland).10.14(26)(17) Amended and Restated Sanmina-SCI Corporation Deferred Compensation Plan dated June 9, 2008.10.15(27) 2003 Employee Stock Purchase Plan.10.16(28) (removed and reserved)89Table of Contents10.17(29)(17) (removed and reserved)10.18(30) Asset Purchase and Sale Agreement dated February 17, 2008 by and among the Registrant, Sanmina-SCI USA Inc., SCITechnology, Inc., Sanmina-SCI Systems de Mexico S.A. de C.V., Sanmina-SCI Systems Services de Mexico S.A. de C.V.,Sanmina-SCI Hungary Electronics Manufacturing Limited Liability Company, Sanmina-SCI Australia PTY LTD and FoxteqHoldings, Inc.10.19(31) Amendment to Asset Purchase Agreement dated February 17, 2008 by and among the Registrant, Sanmina-SCI USA Inc., SCITechnology, Inc., Sanmina-SCI Systems de Mexico S.A. de C.V., Sanmina-SCI Systems Services de Mexico S.A. de C.V.,Sanmina-SCI Hungary Electronics Manufacturing Limited Liability Company, Sanmina-SCI Australia PTY LTD and FoxteqHoldings, Inc., dated July 7, 2008.10.20(32) Asset Purchase Agreement dated April 25, 2008 by and among Sanmina-SCI USA Inc., Sanmina-SCI Systems de Mexico S.A. deC.V., Sanmina-SCI Systems Services de Mexico S.A. de C.V., Lenovo (Singapore) Pte.Ltd. and Lenovo Centro Tecnologico, SdeRLde C.V.10.21(33)(17) Revised form of Officer and Director Indemnification Agreement.10.22(34) Loan, Guaranty and Security Agreement, dated as of November 19, 2008, among the Registrant and certain of, as DesignatedCanadian Guarantors, the financial institutions party thereto from time to time as its subsidiaries as borrowers, Sanmina-SCISystems (Canada) Inc. and SCI Brockville Corp.s lenders and Bank of America, N.A., as agent for such lenders.10.23(35)(17) 2009 Incentive Plan, as amended on March 12, 2012.10.24(36) Credit and Security Agreement dated as of November 24, 2008 by and among Sanmina SPV LLC, the lenders named therein andDeutsche Bank AG, New York Branch, as administrative agent and collateral agent.10.25(37)(17) Deferred Compensation Plan for Outside Directors amended and restated effective January 1, 2009.10.27 (removed and reserved)10.28(38)(17) Form of Stock Option Agreement for use under the 2009 Incentive Plan.10.29(39)(17) Form of Restricted Stock Unit Agreement for use under the 2009 Incentive Plan.10.30(40)(17) Form of Restricted Stock Agreement for use under the 2009 Incentive Plan.10.31(41)(17) Employment offer letter dated September 4, 2009 between the Registrant and Bob Eulau.10.32(42)(17) (removed and reserved)10.33(43)(17) Form of Change of Control Severance Benefit Agreement.10.34(44) Amendment No. 1 dated as of April 6, 2010 to Loan, Guaranty and Security Agreement dated as of November 19, 2008 among theRegistrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCI Brockville Corp., asDesignated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A. as agent for such lenders.10.35(45) Incremental Loan Agreement Joinder dated as of April 6, 2010 among the parties to the Loan and Security Agreement datedNovember 19, 2008 and Goldman Sachs Lending Partners LLC and Morgan Stanley Senior Funding, Inc., as assuming lendersunder the Loan and Security Agreement.10.36(46)(17) (removed and reserved)10.37 (removed and reserved)10.38(47) Amendment No. 2 dated as of December 20, 2010 to Loan, Guaranty and Security Agreement dated as of November 19, 2008among the Registrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCI BrockvilleCorp., as Designated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A. as agent for suchlenders.10.39(48) (removed and reserved)10.40(49) Purchase Agreement among the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities, Inc.,Goldman Sachs & Co. and Morgan Stanley & Co. Incorporated dated April 26, 2011.10.41 (removed and reserved)10.42(50) Amended and Restated Loan, Guaranty and Security Agreement dated as of March 16, 2012 among the Registrant and certain of itssubsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCI Brockville Corp., as Designated Canadian Guarantors,the financial institutions party thereto and Bank of America, N.A., as agent for such lenders.10.43(51) Amendment No. 1 dated as of July 12, 2012 to Amended and Restated Loan, Guaranty and Security Agreement dated as of March16, 2012 among the Registrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCIBrockville Corp., as Designated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A., as agentfor such lenders.10.44(52) Loan Agreement between the Registrant and Union Bank N.A. dated July 19, 2012.90Table of Contents10.45(53) Amendment No. 2 dated as of November 26, 2012 to Amended and Restated Loan, Guaranty and Security Agreement dated as ofMarch 16, 2012 among the Registrant and certain of its subsidiaries as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCIBrockville Corp., as Designated Canadian Guarantors, the financial institutions as party thereto and Bank of America, N.A., asagent for such lenders.10.46(17)(54) Summary of 2013 Non-Employee Director Compensation Program10.47(55) Amendment No. 3 dated as of February 12, 2013 to Amended and Restated Loan, Guaranty and Security Agreement dated as ofMarch 16, 2012 among the Registrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCIBrockville Corp., as Designated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A., as agentfor such lenders.14.1 Code of Business Conduct and Ethics of the Registrant (filed herewith).21.1 Subsidiaries of the Registrant (filed herewith).23.1 Consent of KPMG LLP, independent registered public accounting firm (filed herewith).31.1 Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).31.2 Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).32.1(56) Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002 (furnished herewith).32.2(56) Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002 (furnished herewith).101.INS XBRL Instance Document101.SCH XBRL Taxonomy Extension Schema Document101.CAL XBRL Taxonomy Extension Calculation Linkbase Document101.DEF XBRL Taxonomy Extension Definition Linkbase Document101.LAB XBRL Taxonomy Extension Label Linkbase Document101.PRE XBRL Taxonomy Extension Presentation Linkbase Document91Table of Contents(1) Incorporated by reference to Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1996, SEC FileNo. 000-21272, filed with the Securities and Exchange Commission (“SEC”) on December 24, 1996.(2) Incorporated by reference to Exhibit 3.1(a) to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2001, filed withthe SEC on May 11, 2001.(3) Incorporated by reference to Exhibit 3.1.2 to the Registrant's Registration Statement on Form S-4, filed with the SEC on August 10, 2001.(4) Incorporated by reference to Exhibit 3.1.3 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 2001, filed withthe SEC on December 21, 2001.(5) Incorporated by reference to Exhibit 3.2 to Registrant's Current Report on Form 8-K, filed with the SEC on December 5, 2008.(6) Incorporated by reference to Exhibit 3.6 to Registrant's Current Report on Form 8-K, filed with the SEC on August 19, 2009.(7) (removed and reserved)(8) (removed and reserved)(9) (removed and reserved)(10) (removed and reserved)(11) (removed and reserved)(12) (removed and reserved)(13) (removed and reserved)(14) (removed and reserved)(15) Incorporated by reference from exhibit to the Registrant's Current Report on Form 8-K filed with the SEC on May 10, 2011.(16) Incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-8, filed with the SEC on May 25, 1999.(17) Compensatory plan in which an executive officer or director participates.(18) Incorporated by reference to Exhibit 10.29.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 28, 2002, filed withthe SEC on December 4, 2002.(19) Incorporated by reference to Exhibit 10.4 to the Registrant's Registration Statement on Form S-8, SEC File No. 333-23565, filed with the SEC onMarch 19, 1997.(20) Incorporated by reference to Exhibit 4.2 to the Registrant's Registration Statement on Form S-8, filed with the SEC on December 20, 2001.(21) Incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-8, filed with the SEC on December 20, 2001.(22) Incorporated by reference to Exhibit 10.4 to the Registrant's Registration Statement on Form S-1, SEC File No. 33-70700, filed with the SEC onFebruary 19, 1993.(23) Incorporated by reference to Exhibit 10.75 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.(24) Incorporated by reference to Exhibit 10.50 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 28, 2002, filed withthe SEC on December 4, 2002.(25) Incorporated by reference to Exhibit 10.50.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 28, 2002, filed withthe SEC on December 4, 2002.(26) Incorporated by reference to Exhibit 10.74 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.(27) Incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8, filed with the SEC on April 23, 2003.(28) (removed and reserved)(29) (removed and reserved)(30) Incorporated by reference to Exhibit 10.64 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2008, filed withthe SEC on May 6, 2008.(31) Incorporated by reference to Exhibit 10.71 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.92Table of Contents(32) Incorporated by reference to Exhibit 10.67 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2008, filed withthe SEC on May 6, 2008(33) Incorporated by reference to Exhibit 10.42 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.(34) Incorporated by reference to Exhibit 10.23 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012, filed with theSEC on May 1, 2012.(35) Incorporated by reference to Exhibit 10.37 of the Registrant's Registration Statement on Form S-8, filed with the SEC on February 9, 2011.(36) Incorporated by reference to Exhibit 10.38 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 27, 2008, filedwith the SEC on February 2, 2009.(37) Incorporated by reference to Exhibit 10.40 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009.(38) Incorporated by reference to Exhibit 10.43 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009(39) Incorporated by reference to Exhibit 10.44 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009(40) Incorporated by reference to Exhibit 10.45 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009(41) Incorporated by reference to Exhibit 10.46 to the Registrant's Annual Report on Form 10-K for the fiscal year ended October 3, 2009, filed with theSEC on December 1, 2009.(42) (removed and reserved)(43) Incorporated by reference to Exhibit 10.48 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended January 2, 2010, filed withthe SEC on February 5, 2010.(44) Incorporated by reference to Exhibit 10.49 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2010, filed with theSEC on April 30, 2010.(45) Incorporated by reference to Exhibit 10.50 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2010, filed with theSEC on April 30, 2010.(46) (removed and reserved)(47) Incorporated by reference to the same number exhibit to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended January 1, 2011,filed with the SEC on February 8, 2011.(48) (removed and reserved)(49) Incorporated by reference to Exhibit 10.39 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2011, filed with theSEC on August 1, 2011.(50) Incorporated by reference to Exhibit 10.42 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012, filed withthe SEC on May 1, 2012.(51) Incorporated by reference to Exhibit 10.43 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 2012, filed withthe SEC on November 21, 2012.(52) Incorporated by reference to Exhibit 10.44 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 2012, filed withthe SEC on November 21, 2012.(53) Incorporated by reference to Exhibit 10.45 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2012, filed withthe SEC on February 4, 2013.(54) Incorporated by reference to Exhibit 10.46 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2013, filed with theSEC on April 29, 2013.(55) Incorporated by reference to Exhibit 10.47 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2013, filed with theSEC on April 29, 2013.(56) This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities ofthat Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934,whether made before or after the date hereof and irrespective of any general incorporation language in any filings.(c) Financial Statement Schedules. See Item 15(a)(2) above.93Table of ContentsSIGNATURESPursuant 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 onits behalf by the undersigned, thereunto duly authorized. Sanmina Corporation(Registrant) By:/s/ JURE SOLA Jure Sola Chairman and Chief Executive OfficerDate: November 27, 2013 94Table of ContentsPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities and on the dates indicated.POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Jure Sola and Robert K. Eulau and each of them, his or her true and lawfulattorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and allcapacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents inconnection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power andauthority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could doin person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, maylawfully do or cause to be done by virtue hereof.SignatureTitleDate /s/ JURE SOLAChief Executive Officer and Director(Principal Executive Officer)November 27, 2013Jure Sola /s/ ROBERT K. EULAUChief Financial Officer(Principal Financial Officer)November 27, 2013Robert K. Eulau /s/ DAVID ANDERSONSenior Vice President and Corporate Controller(Principal Accounting Officer)November 27, 2013David Anderson /s/ NEIL BONKEDirectorNovember 27, 2013Neil Bonke /s/ JOHN P. GOLDSBERRYDirectorNovember 27, 2013John P. Goldsberry /s/ JOSEPH LICATADirectorNovember 27, 2013Joseph Licata /s/ MARIO M. ROSATIDirectorNovember 27, 2013Mario M. Rosati /s/ WAYNE SHORTRIDGEDirectorNovember 27, 2013Wayne Shortridge /s/ JACKIE M. WARDDirectorNovember 27, 2013Jackie M. Ward 95Table of ContentsFINANCIAL STATEMENT SCHEDULE The financial statement Schedule II-VALUATION AND QUALIFYING ACCOUNTS is filed as part of this Form 10-K. SANMINA CORPORATIONSCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS Balance atBeginning ofPeriod Charged(Credited) toOperations Charges Utilized Balance at Endof Period (In thousands)Allowances for Doubtful Accounts, Product Returns and Other Net Sales adjustments Fiscal year ended October 1, 2011$16,752 $(1,187) $(1,028) $14,537Fiscal year ended September 29, 2012$14,537 $(826) $(1,679) $12,032Fiscal year ended September 28, 2013$12,032 $(325) $28 $11,73596Table of ContentsEXHIBIT INDEXExhibitNumber Description 3.1(1) Restated Certificate of Incorporation of the Registrant, dated January 31, 1996.3.2(2) Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant, dated March 9, 2001.3.3(3) Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of the Registrant, datedMay 31, 2001.3.4(4) Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant, dated December 7, 2001.3.5(5) Amended and Restated Bylaws of the Registrant adopted by the Board of Directors on December 1, 2008.3.6(6) Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant, as amended, dated July 27, 2009.3.7 Certificate of Ownership and Merger as filed with the Secretary of State of the State of Delaware and effective November 15, 2012(filed herewith).4.1 (removed and reserved)4.2(7) (removed and reserved)4.3(8) (removed and reserved)4.4(9) (removed and reserved)4.5 (removed and reserved)4.6(10) (removed and reserved)4.7(11) (removed and reserved)4.8(12) (removed and reserved)4.9(13) (removed and reserved)4.10(14) (removed and reserved)4.11(15) Indenture, dated as of May 10, 2011, among Sanmina-SCI Corporation, certain subsidiaries of Sanmina-SCI Corporation, asguarantors, and U.S. Bank National Association, as trustee.4.12(15) Form of Note for Sanmina-SCI Corporation's 7% Senior Notes due 2019.4.13(15) (removed and reserved)10.1 (removed and reserved)10.2(16)(17) 1999 Stock Plan.10.3(18) Addendum to the 1999 Stock Plan (Additional Terms and Conditions for Employees of the French subsidiary(ies)), datedFebruary 21, 2001.10.4(19) 1995 Director Option Plan.10.5 (removed and reserved)10.6 (removed and reserved)10.7 (removed and reserved)10.8(20) SCI Systems, Inc. 2000 Stock Incentive Plan.10.9(21) SCI Systems, Inc. Board of Directors Deferred Compensation Plan.10.10(22) Form of Indemnification Agreement executed by the Registrant and its officers and directors pursuant to the Delaware reincorporation.10.11(23)(17) Amended and Restated Sanmina-SCI Corporation Deferred Compensation Plan for Outside Directors.10.12(24) Rules of the Sanmina-SCI Corporation Stock Option Plan 2000 (Sweden).10.13(25) Rules of the Sanmina-SCI Corporation Stock Option Plan 2000 (Finland).10.14(26)(17) Amended and Restated Sanmina-SCI Corporation Deferred Compensation Plan dated June 9, 2008.10.15(27) 2003 Employee Stock Purchase Plan.10.16(28) (removed and reserved)97Table of Contents10.17(29)(17) (removed and reserved)10.18(30) Asset Purchase and Sale Agreement dated February 17, 2008 by and among the Registrant, Sanmina-SCI USA Inc., SCITechnology, Inc., Sanmina-SCI Systems de Mexico S.A. de C.V., Sanmina-SCI Systems Services de Mexico S.A. de C.V.,Sanmina-SCI Hungary Electronics Manufacturing Limited Liability Company, Sanmina-SCI Australia PTY LTD and FoxteqHoldings, Inc.10.19(31) Amendment to Asset Purchase Agreement dated February 17, 2008 by and among the Registrant, Sanmina-SCI USA Inc., SCITechnology, Inc., Sanmina-SCI Systems de Mexico S.A. de C.V., Sanmina-SCI Systems Services de Mexico S.A. de C.V.,Sanmina-SCI Hungary Electronics Manufacturing Limited Liability Company, Sanmina-SCI Australia PTY LTD and FoxteqHoldings, Inc., dated July 7, 2008.10.20(32) Asset Purchase Agreement dated April 25, 2008 by and among Sanmina-SCI USA Inc., Sanmina-SCI Systems de Mexico S.A. deC.V., Sanmina-SCI Systems Services de Mexico S.A. de C.V., Lenovo (Singapore) Pte.Ltd. and Lenovo Centro Tecnologico, SdeRLde C.V.10.21(33)(17) Revised form of Officer and Director Indemnification Agreement.10.22(34) Loan, Guaranty and Security Agreement, dated as of November 19, 2008, among the Registrant and certain of, as DesignatedCanadian Guarantors, the financial institutions party thereto from time to time as its subsidiaries as borrowers, Sanmina-SCISystems (Canada) Inc. and SCI Brockville Corp.s lenders and Bank of America, N.A., as agent for such lenders.10.23(35)(17) 2009 Incentive Plan, as amended on March 12, 2012.10.24(36) Credit and Security Agreement dated as of November 24, 2008 by and among Sanmina SPV LLC, the lenders named therein andDeutsche Bank AG, New York Branch, as administrative agent and collateral agent.10.25(37)(17) Deferred Compensation Plan for Outside Directors amended and restated effective January 1, 2009.10.27 (removed and reserved)10.28(38)(17) Form of Stock Option Agreement for use under the 2009 Incentive Plan.10.29(39)(17) Form of Restricted Stock Unit Agreement for use under the 2009 Incentive Plan.10.30(40)(17) Form of Restricted Stock Agreement for use under the 2009 Incentive Plan.10.31(41)(17) Employment offer letter dated September 4, 2009 between the Registrant and Bob Eulau.10.32(42)(17) (removed and reserved)10.33(43)(17) Form of Change of Control Severance Benefit Agreement.10.34(44) Amendment No. 1 dated as of April 6, 2010 to Loan, Guaranty and Security Agreement dated as of November 19, 2008 among theRegistrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCI Brockville Corp., asDesignated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A. as agent for such lenders.10.35(45) Incremental Loan Agreement Joinder dated as of April 6, 2010 among the parties to the Loan and Security Agreement datedNovember 19, 2008 and Goldman Sachs Lending Partners LLC and Morgan Stanley Senior Funding, Inc., as assuming lendersunder the Loan and Security Agreement.10.36(46)(17) (removed and reserved)10.37 (removed and reserved)10.38(47) Amendment No. 2 dated as of December 20, 2010 to Loan, Guaranty and Security Agreement dated as of November 19, 2008among the Registrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCI BrockvilleCorp., as Designated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A. as agent for suchlenders.10.39(48) (removed and reserved)10.40(49) Purchase Agreement among the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities, Inc.,Goldman Sachs & Co. and Morgan Stanley & Co. Incorporated dated April 26, 2011.10.41 (removed and reserved)10.42(50) Amended and Restated Loan, Guaranty and Security Agreement dated as of March 16, 2012 among the Registrant and certain of itssubsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCI Brockville Corp., as Designated Canadian Guarantors,the financial institutions party thereto and Bank of America, N.A., as agent for such lenders.10.43(51) Amendment No. 1 dated as of July 12, 2012 to Amended and Restated Loan, Guaranty and Security Agreement dated as of March16, 2012 among the Registrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCIBrockville Corp., as Designated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A., as agentfor such lenders.10.44(52) Loan Agreement between the Registrant and Union Bank N.A. dated July 19, 2012.98Table of Contents10.45(53) Amendment No. 2 dated as of November 26, 2012 to Amended and Restated Loan, Guaranty and Security Agreement dated as ofMarch 16, 2012 among the Registrant and certain of its subsidiaries as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCIBrockville Corp., as Designated Canadian Guarantors, the financial institutions as party thereto and Bank of America, N.A., asagent for such lenders.10.46(17)(54) Summary of 2013 Non-Employee Director Compensation Program10.47(55) Amendment No. 3 dated as of February 12, 2013 to Amended and Restated Loan, Guaranty and Security Agreement dated as ofMarch 16, 2012 among the Registrant and certain of its subsidiaries, as borrowers, Sanmina-SCI Systems (Canada), Inc. and SCIBrockville Corp., as Designated Canadian Guarantors, the financial institutions party thereto and Bank of America, N.A., as agentfor such lenders.14.1 Code of Business Conduct and Ethics of the Registrant (filed herewith).21.1 Subsidiaries of the Registrant (filed herewith).23.1 Consent of KPMG LLP, independent registered public accounting firm (filed herewith).31.1 Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).31.2 Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).32.1(56) Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002 (furnished herewith).32.2(56) Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002 (furnished herewith).101.INS XBRL Instance Document101.SCH XBRL Taxonomy Extension Schema Document101.CAL XBRL Taxonomy Extension Calculation Linkbase Document101.DEF XBRL Taxonomy Extension Definition Linkbase Document101.LAB XBRL Taxonomy Extension Label Linkbase Document101.PRE XBRL Taxonomy Extension Presentation Linkbase Document99Table of Contents(1) Incorporated by reference to Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1996, SEC FileNo. 000-21272, filed with the Securities and Exchange Commission (“SEC”) on December 24, 1996.(2) Incorporated by reference to Exhibit 3.1(a) to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2001, filed withthe SEC on May 11, 2001.(3) Incorporated by reference to Exhibit 3.1.2 to the Registrant's Registration Statement on Form S-4, filed with the SEC on August 10, 2001.(4) Incorporated by reference to Exhibit 3.1.3 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 2001, filed withthe SEC on December 21, 2001.(5) Incorporated by reference to Exhibit 3.2 to Registrant's Current Report on Form 8-K, filed with the SEC on December 5, 2008.(6) Incorporated by reference to Exhibit 3.6 to Registrant's Current Report on Form 8-K, filed with the SEC on August 19, 2009.(7) (removed and reserved)(8) (removed and reserved)(9) (removed and reserved)(10) (removed and reserved)(11) (removed and reserved)(12) (removed and reserved)(13) (removed and reserved)(14) (removed and reserved)(15) Incorporated by reference from exhibit to the Registrant's Current Report on Form 8-K filed with the SEC on May 10, 2011.(16) Incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-8, filed with the SEC on May 25, 1999.(17) Compensatory plan in which an executive officer or director participates.(18) Incorporated by reference to Exhibit 10.29.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 28, 2002, filed withthe SEC on December 4, 2002.(19) Incorporated by reference to Exhibit 10.4 to the Registrant's Registration Statement on Form S-8, SEC File No. 333-23565, filed with the SEC onMarch 19, 1997.(20) Incorporated by reference to Exhibit 4.2 to the Registrant's Registration Statement on Form S-8, filed with the SEC on December 20, 2001.100Table of Contents(21) Incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-8, filed with the SEC on December 20, 2001.(22) Incorporated by reference to Exhibit 10.4 to the Registrant's Registration Statement on Form S-1, SEC File No. 33-70700, filed with the SEC onFebruary 19, 1993.(23) Incorporated by reference to Exhibit 10.75 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.(24) Incorporated by reference to Exhibit 10.50 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 28, 2002, filed withthe SEC on December 4, 2002.(25) Incorporated by reference to Exhibit 10.50.1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 28, 2002, filed withthe SEC on December 4, 2002.(26) Incorporated by reference to Exhibit 10.74 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.(27) Incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-8, filed with the SEC on April 23, 2003.(28) (removed and reserved)(29) (removed and reserved)(30) Incorporated by reference to Exhibit 10.64 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2008, filed withthe SEC on May 6, 2008.(31) Incorporated by reference to Exhibit 10.71 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.(32) Incorporated by reference to Exhibit 10.67 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2008, filed withthe SEC on May 6, 2008(33) Incorporated by reference to Exhibit 10.42 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008, filed withthe SEC on August 4, 2008.(34) Incorporated by reference to Exhibit 10.23 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012, filed with theSEC on May 1, 2012.(35) Incorporated by reference to Exhibit 10.37 of the Registrant's Registration Statement on Form S-8, filed with the SEC on February 9, 2011.(36) Incorporated by reference to Exhibit 10.38 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended December 27, 2008, filedwith the SEC on February 2, 2009.(37) Incorporated by reference to Exhibit 10.40 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009.(38) Incorporated by reference to Exhibit 10.43 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009(39) Incorporated by reference to Exhibit 10.44 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009(40) Incorporated by reference to Exhibit 10.45 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2009, filed withthe SEC on May 5, 2009(41) Incorporated by reference to Exhibit 10.46 to the Registrant's Annual Report on Form 10-K for the fiscal year ended October 3, 2009, filed with theSEC on December 1, 2009.(42) (removed and reserved)(43) Incorporated by reference to Exhibit 10.48 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended January 2, 2010, filed withthe SEC on February 5, 2010.(44) Incorporated by reference to Exhibit 10.49 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2010, filed with theSEC on April 30, 2010.(45) Incorporated by reference to Exhibit 10.50 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2010, filed with theSEC on April 30, 2010.(46) (removed and reserved)(47) Incorporated by reference to the same number exhibit to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended January 1, 2011,filed with the SEC on February 8, 2011.101Table of Contents(48) (removed and reserved)(49) Incorporated by reference to Exhibit 10.39 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2011, filed with theSEC on August 1, 2011.(50) Incorporated by reference to Exhibit 10.42 to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012, filed withthe SEC on May 1, 2012.(51) Incorporated by reference to Exhibit 10.43 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 2012, filed withthe SEC on November 21, 2012.(52) Incorporated by reference to Exhibit 10.44 to the Registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 2012, filed withthe SEC on November 21, 2012.(53) Incorporated by reference to Exhibit 10.45 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2012, filed withthe SEC on February 4, 2013.(54) Incorporated by reference to Exhibit 10.46 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2013, filed with theSEC on April 29, 2013.(55) Incorporated by reference to Exhibit 10.47 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2013, filed with theSEC on April 29, 2013.(56) This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities ofthat Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934,whether made before or after the date hereof and irrespective of any general incorporation language in any filings.102Exhibit 14.1SANMINA CORPORATIONCODE OF BUSINESS CONDUCT AND ETHICS(Revised July 19, 2013)I.INTRODUCTIONThis Code of Business Conduct and Ethics helps ensure compliance with legal requirements and our standards of businessconduct, and it applies to all worldwide employees (including executive officers) of Sanmina Corporation and its wholly-ownedsubsidiaries (collectively, the “Company”) and to members of its Board of Directors. All Company employees are expected to read andunderstand this Code of Business Conduct and Ethics, uphold these standards in day‑to‑day activities, comply with all applicable policiesand procedures, and ensure that all agents and contractors are aware of, understand and adhere to these standards.Because the principles described in this Code of Business Conduct and Ethics are general in nature, you should also review allapplicable Company policies and procedures for more specific instruction, and contact the Human Resources Department or LegalDepartment if you have any questions.Nothing in this Code of Business Conduct and Ethics, in any company policies and procedures, or in other relatedcommunications (verbal or written) creates or implies an employment contract or term of employment.We are committed to continuously reviewing and updating our policies and procedures. Therefore, this Code of BusinessConduct and Ethics is subject to modification. This Code of Business Conduct and Ethics supersedes all other such codes, policies,procedures, instructions, practices, rules or written or verbal representations to the extent they are inconsistent.Please sign the acknowledgment form at the end of this Code of Business Conduct and Ethics and return the form to the HumanResources Manager at your facility indicating that you have received, read, understand and agree to comply with the Code of BusinessConduct and Ethics. The signed acknowledgment form will be located in your personnel file. As part of the Company’s ongoingcompliance process, officers and other appropriate personnel will be asked to periodically complete online training regarding theprinciples contained in the Code of Business Conduct and Ethics. In addition, periodically, you may be asked to participate in seminars,training meetings and similar activities related to reinforcing your understanding of this Code of Business Conduct and Ethics and itsapplicability to the Company's business.II.COMPLIANCE IS EVERYONE'S BUSINESSEthical business conduct is critical to our business. As an employee, your responsibility is to respect and adhere to thesepractices. Many of these practices reflect legal or regulatory requirements. Violations of these laws and regulations can create significantliability for you, the Company, its directors, officers, and other employees.Part of your job and ethical responsibility is to help enforce this Code of Business Conduct and Ethics. You should be alert topossible violations and report possible violations to the Human Resources Department or the Legal Department. Violations can bereported as follows:General Counsel Sanmina Corporation2700 North First StreetSan Jose, CA 95134Phone: (408) 964-3500Fax: (408) 964-3888The Company maintains an anonymous Open Door Hotline. The Hotline provides a method for employees to confidentiallyreport suspected violations of this Code of Business Conduct and Ethics, either by toll-free phone access or web access. Employees andstakeholders may use this Hotline for reporting, among other things, matters pertaining to accounting, internal accounting controls, orauditing matters. This Hotline is operated by a third-party service provider to ensure anonymity. Employees can access the Hotline asfollows:Telephone (from the United States/Canada): 1-866-879-0424Please go to www.opendoor.ethicspoint.com for the current list of international numbers.Internet: www.opendoor.ethicspoint.comIf you believe that, based on the nature of the suspected improprieties and the persons you believe to be involved, reportingviolations to the Human Resources Department or the Legal Department would be ineffective, you may report such violations to theChairperson of the Audit Committee or to the Chairperson of the Nominating and Governance Committee. Reports can be made to theChairperson of the Audit Committee or the Chairperson of the Nominating and Governance Committee as follows:Chairperson of the Audit CommitteeSanmina Corporation2700 North First StreetSan Jose, CA 95134Phone: (408) 964-3850Chairperson of the Nominating and Governance CommitteeSanmina Corporation2700 North First StreetSan Jose, CA 95134Phone: (408) 964-3500The Company will promptly and thoroughly investigate all credible allegations of breaches of this Code of Business Conductand Ethics as appropriate under the circumstances. You must cooperate in any internal or external investigations of possible violations.You should know that reprisal, threats, retribution or retaliation against any person who has in good faith reported a violation or asuspected violation of law, this Code of Business Conduct and Ethics or other Company policies, or against any person who is assisting inany investigation or process with respect to such a violation, is both a violation of Company policy and is prohibited by a variety of stateand federal civil and criminal laws including the Sarbanes-Oxley Act of 2002. Accordingly, the Company will not permit the making ofany reprisal, threats, retribution or retaliation or similar actions against any person making a good faith report of a suspected violation oflaw, this Code of Business Conduct and Ethics or other Company policies.Violations of law, this Code of Business Conduct and Ethics or other Company policies or procedures by Company employeescan lead to disciplinary action up to and including termination.In trying to determine whether any given action is appropriate, use the following test. Imagine that the words you are using orthe action you are taking is going to be fully disclosed in the media with all the details, including your photo. If you are uncomfortablewith the idea of this information being made public, perhaps you should think again about your words or your course of action.In all cases, if you are unsure about the appropriateness of an event or action, please seek assistance in interpreting therequirements of these practices by contacting the Legal Department.III.YOUR RESPONSIBILITIES TO THE COMPANY AND ITS STOCKHOLDERSA.General Standards of ConductThe Company expects all employees, agents and contractors to exercise good judgment to ensure the safety and welfare ofemployees, agents and contractors and to maintain a cooperative, efficient, positive, harmonious and productive work environment andbusiness organization. These standards apply while working on our premises or remotely, at offsite locations where our business is beingconducted, at Company‑sponsored business and social events, or at any other place where you are a representative of the Company.Employees, agents or contractors who engage in misconduct or whose performance is unsatisfactory may be subject to corrective action,up to and including termination. You should review our employment handbook for more detailed information.B.Applicable LawsAll Company employees, agents and contractors must comply with all applicable laws, regulations, rules and regulatory orders.Company employees located outside of the United States must comply with laws, regulations, rules and regulatory orders of the UnitedStates, including the Foreign Corrupt Practices Act and the U.S. Export Control Act, in addition to applicable local laws. Each employee,agent and contractor must acquire appropriate knowledge of the requirements relating to his or her duties sufficient to enable him or herto recognize potential dangers and to know when to seek advice from the Legal Department on specific Company policies andprocedures. Violations of laws, regulations, rules and orders may subject the employee, agent or contractor to individual criminal or civilliability, as well as to discipline by the Company. Such individual violations may also subject the Company to civil or criminal liability orthe loss of business.C.Conflicts of InterestEach of us has a responsibility to the Company, our stockholders and each other. Although this duty does not prevent us fromengaging in personal transactions and investments, it does demand that we avoid situations where a conflict of interest might occur orappear to occur. The Company is subject to scrutiny from many different individuals and organizations. We should always strive to avoideven the appearance of impropriety.What constitutes a conflict of interest? A conflict of interest exists where the interests or benefits of one person or entityconflict with the interests or benefits of the Company. Examples include:(i)Employment/Outside Employment. In consideration of your employment with the Company, youare expected to devote your full attention to the business interests of the Company. You are prohibited from engaging in any activity thatinterferes with your performance or responsibilities to the Company or is otherwise in conflict with or prejudicial to the Company. Ourpolicies prohibit any employee from accepting simultaneous full-time or part-time employment with another company withoutobtaining the consent of both your immediate supervisor and the General Counsel of the Company. Additionally, you must disclose tothe Company any interest that you have that may conflict with the business of the Company. If you have any questions on thisrequirement, you should contact your supervisor or the Legal Department.(ii)Outside Directorships. The Company views serving on the Board of Directors or in a similarcapacity with any entity as a potential conflict of interest. Therefore, prior to accepting any such appointment, you must obtain theconsent of both your immediate supervisor and the General Counsel of the Company. Such approval may be conditioned upon thecompletion of specified actions. Also, any compensation you receive for such service should be commensurate to your responsibilities.(iii)Business Interests. If you are considering investing in a Company customer, supplier, developer orcompetitor, you must first take great care to ensure that these investments do not compromise your responsibilities to the Company.Many factors should be considered in determining whether a conflict exists, including the size and nature of the investment; your abilityto influence the Company's decisions; your access to confidential information of the Company or of the other company; and the natureof the relationship between the Company and the other company. Therefore, while owning a few hundred shares of a publicly traded“tier-one” competitor will not, by itself, violate Company policy, ownership of five or ten percent of the outstanding shares of a supplierto the Company might constitute a violation of Company policy.(iv)Related Parties. As a general rule, you should avoid conducting Company business with a relativeor significant other, or with a business in which a relative or significant other is associated in any significant role. In cases in which arelative or significant other of an executive officer or director is an employee of the Company, the direct supervisor of such relative orsignificant other should annually confirm to senior management and to the Company's Board of Directors that such relative's orsignificant other's employment, performance review or compensation was not influenced in any way by such relationship. Relativesinclude spouse, sister, brother, daughter, son, mother, father, grandparents, aunts, uncles, nieces, nephews, cousins, step relationships,and in-laws. Significant others include persons living in a spousal (including same sex) or familial fashion with an employee.If such a related party transaction is unavoidable, you must fully disclose the nature of the related party transaction to theCompany's Chief Financial Officer. If determined to be material to the Companyby the Chief Financial Officer, the Company's Audit Committee must review and approve in writing in advance these related partytransactions. The most significant related party transactions, particularly those involving the Company's directors or executive officers,must be reviewed and approved in writing in advance by the Company's Board of Directors. The Company must report all materialrelated party transactions under applicable accounting rules, Federal securities laws (including rules and regulations of the Securities andExchange Commission (SEC)), and stock market rules. Any dealings with a related party must be conducted in such a way that nopreferential treatment is given to this business.The Company discourages the employment of relatives and significant others in positions or assignments within the samedepartment and prohibits the employment of these individuals in positions that have a financial dependence or influence (e.g., an auditingor control relationship, or a supervisor/subordinate relationship). The purpose of this policy is to prevent the organizational impairmentand conflicts that are a likely outcome of the employment of relatives or significant others, especially in a supervisor/subordinaterelationship.(v)Other Situations. Because other conflicts of interest may arise, it would be impractical to attemptto list all possible situations. If a proposed transaction or situation raises any questions or doubts in your mind, you should consult theLegal Department.D.Corporate OpportunitiesEmployees, officers and directors may not exploit for their own personal gain opportunities that are discovered through the useof corporate property, information or position unless the opportunity is disclosed fully in writing to the Company's Board of Directorsand the Board of Directors declines to pursue such opportunity.E.Payments or GiftsUnder no circumstances may employees, agents, contractors, vendors or consultants: (i) accept any offer, payment, promise topay, or authorization to pay any money, gift, or anything of value from customers, or (ii) offer to pay, make payment, promise to pay, orissue authorization to pay any money, gift, or anything of value to customers in a manner that is intended, directly or indirectly, toinfluence any business decision or to cause any action or failure to act that would constitute the commitment of fraud. Inexpensive gifts,infrequent business meals, celebratory events and entertainment, provided that they are not excessive or create an appearance ofimpropriety, do not violate this policy. Questions regarding whether a particular payment or gift violates this policy are to be directed toHuman Resources or the Legal Department.F.Protecting the Company's Confidential InformationThe Company's confidential information is a valuable asset. The Company's confidential information includes, but is not limitedto, product architectures; source codes; product plans and road maps; names and lists of customers, dealers, and employees; and financialinformation. This information is the property of the Company and may be protected by patent, trademark, copyright and trade secretlaws. All confidential information must be used for Company business purposes only. Every employee, agent and contractor mustsafeguard it. THIS RESPONSIBILITY INCLUDES NOT DISCLOSING THE COMPANY CONFIDENTIALINFORMATION SUCH AS INFORMATION REGARDING THE COMPANY'S PRODUCTS OR BUSINESSOVER THE INTERNET UNLESS YOU HAVE CONFIRMED THAT A NONDISCLOSURE AGREEMENT IS INPLACE AND THAT THE ELECTRONIC COMMUNICATIONS ARE APPROPRIATELY SAFEGUARDED. Thisresponsibility includes the safeguarding, securing and proper disposal of confidential information in accordance with the Company'spolicy on Maintaining and Managing Records set forth in Section III (L) of this Code of Business Conduct and Ethics. This obligationextends to confidential information of third parties, which the Company has rightfully received under Non‑Disclosure Agreements. Seethe Company's policy dealing with Handling the Confidential Information of Others set forth in Section III (G) of this Code of BusinessConduct and Ethics.(i)Proprietary Information and Inventions Agreement. When you joined the Company, you signedan agreement to protect and hold confidential the Company's proprietary information. This agreement remains in effect for as long asyou work for the Company and after you leave the Company. Under this agreement, you may not disclose the Company's confidentialinformation to anyone or use it to benefit anyone other than the Company without the prior written consent of an authorized Companyofficer.(ii)Disclosure of Company Confidential Information. To further the Company's business, fromtime to time our confidential information may be disclosed to potential business partners. However, such disclosure should never be donewithout carefully considering its potential benefits and risks. If you determine in consultation with your manager and other appropriateCompany management that disclosure of confidential information is necessary, you must then contact the Legal Department to ensurethat an appropriate written nondisclosure agreement is signed prior to the disclosure. The Company has standard nondisclosureagreements suitable for most disclosures. You must not sign a third party's nondisclosure agreement or accept changes to the Company'sstandard nondisclosure agreements without review and approval by the Company's Legal Department; provided, however, that thisprohibition shall not apply to a document which you are required to sign in order to gain access to a particular location (e.g., the electronicdocument that certain companies require you to sign in order to get a badge). In addition, all Company materials that contain Companyconfidential information, including presentations, must be reviewed and approved by either an individual having the title of VicePresident or higher or the Company's Legal Department prior to publication or use. Furthermore, any employee publication or publiclymade statement that might be perceived or construed as attributable to the Company, made outside the scope of his or her employmentwith the Company, must be reviewed and approved in writing in advance by the Company's Legal Department and must include theCompany's standard disclaimer that the publication or statement represents the views of the specific author and not of the Company.(iii)Requests by Regulatory Authorities. The Company and its employees, agents and contractorsmust cooperate with appropriate government inquiries and investigations. In this context, however, it is important to protect the legalrights of the Company with respect to its confidential information. All government requests for information, documents or investigativeinterviews must be referred to the Company's Legal Department. No financial information may be disclosed without the prior writtenapproval of the Chief Financial Officer.(iv)Company Spokespeople. Specific policies have been established regarding who may communicateinformation to the press and the financial analyst community. All inquiries or calls from the press and financial analysts should bereferred to the Chief Financial Officer or Investor Relations Department. The Company has designated its CEO, CFO and InvestorRelations Department as official Company spokespeople for financial matters. The Company has designated its Investor RelationsDepartment as official Company spokespeople for marketing, technical and other such information. These designees are the only peoplewho may communicate with the press on behalf of the Company.G.Handling the Confidential Information of OthersThe Company has many kinds of business relationships with many companies and individuals. Sometimes, they will volunteerconfidential information about their products or business plans to induce the Company to enter into a business relationship. At othertimes, we may request that a third party provide confidential information to permit the Company to evaluate a potential businessrelationship with that party. Whatever the situation, we must take special care to handle the confidential information of othersresponsibly. We handle such confidential information in accordance with our agreements with such third parties. See also the Company'spolicy on Maintaining and Managing Records in Section III (L) of this Code of Business Conduct and Ethics.(i)Appropriate Nondisclosure Agreements. Confidential information may take many forms. Anoral presentation about a company's product development plans may contain protected trade secrets. A customer list or employee listmay be a protected trade secret. A demo of an alpha version of a company's new software may contain information protected by tradesecret and copyright laws.You should never accept information offered by a third party that is represented as confidential, or which appears from thecontext or circumstances to be confidential, unless an appropriate nondisclosure agreement has been signed with the party offering theinformation. THE LEGAL DEPARTMENT CAN PROVIDE NONDISCLOSURE AGREEMENTS TO FIT ANYPARTICULAR SITUATION, AND WILL COORDINATE APPROPRIATE EXECUTION OF SUCHAGREEMENTS ON BEHALF OF THE COMPANY. Even after a nondisclosure agreement is in place, you should accept onlythe information necessary to accomplish the purpose of receiving it, such as a decision on whether to proceed to negotiate a deal. If moredetailed or extensive confidential information is offered and it is not necessary, for your immediate purposes, it should be refused.(ii)Need‑to‑Know. Once a third party's confidential information has been disclosed to the Company, wehave an obligation to abide by the terms of the relevant nondisclosure agreement and limit its use to the specific purpose for which it wasdisclosed and to disseminate it only to other Company employees with a need to know the information. Every employee, agent andcontractor involved in a potential business relationship with a third party must understand and strictly observe the restrictions on the useand handling of confidential information. When in doubt, consult the Legal Department.(iii)Notes and Reports. When reviewing the confidential information of a third party under anondisclosure agreement, it is natural to take notes or prepare reports summarizing the results of the review and, based partly on thosenotes or reports, to draw conclusions about the suitability of a business relationship. Notes or reports, however, can include confidentialinformation disclosed by the other party and so should be retained only long enough to complete the evaluation of the potential businessrelationship. Subsequently, they should be either destroyed or turned over to the Legal Department for safekeeping or destruction. TheLegal Department will make a judgment as to whether such notes can be destroyed or whether they should be retained in accordancewith the Company's records retention policies. Such notes should be treated just as any other disclosure of confidential information istreated: marked as confidential and distributed only to those Company employees with a need to know.(iv)Competitive Information. You should never attempt to obtain a competitor's confidentialinformation by improper means, and you should especially never contact a competitor regarding their confidential information. Whilethe Company may, and does, employ former employees of competitors, we recognize and respect the obligations of those employees notto use or disclose the confidential information of their former employers.H.Obligations Under Securities Laws ‑"Insider" TradingObligations under the U.S. securities laws apply to everyone. In the normal course of business, officers, directors, employees,agents, contractors and consultants of the Company may come into possession of significant, sensitive information. This information isthe property of the Company -- you have been entrusted with it. You may not profit from it by buying or selling securities yourself, orpassing on the information to others to enable them to profit or for them to profit on your behalf. The purpose of this policy is both toinform you of your legal responsibilities and to make clear to you that the misuse of sensitive information is contrary to Company policyand U.S. securities laws.Insider trading is a crime, penalized by fines of up to $5,000,000 and 20 years in jail for individuals. In addition, theSEC may seek the imposition of a civil penalty of up to three times the profits made or losses avoided from the trading.Insider traders must also disgorge any profits made, and are often subjected to an injunction against future violations.Finally, insider traders may be subjected to civil liability in private lawsuits.Employers and other controlling persons (including supervisory personnel) are also at risk under U.S. securities laws.Controlling persons may, among other things, face penalties of the greater of $5,000,000 or three times the profits made or lossesavoided by the trader if they recklessly fail to take preventive steps to control insider trading.Thus, it is important both to you and the Company that insider-trading violations not occur. You should be aware that stockmarket surveillance techniques are becoming increasingly sophisticated, and the chance that U.S. federal or other regulatory authoritieswill detect and prosecute even small-level trading is significant. Insider trading rules are strictly enforced, even in instances when thefinancial transactions seem small. You should contact the Chief Financial Officer or the Legal Department if you are unsure as towhether or not you are free to trade.The Company has imposed a trading blackout period on members of the Board of Directors, executive officers and certaindesignated employees who, as a consequence of their position with the Company, are more likely to be exposed to material nonpublicinformation about the Company. These directors, executive officers and employees generally may not trade in Company securitiesduring the blackout period.For more details, and to determine if you are restricted from trading during trading blackout periods, you should review theCompany's Insider Trading Compliance Program. You can request a copy of this policy from the Legal Department. You should take afew minutes to read the Insider Trading Compliance Program carefully, paying particular attention to the specific policies and thepotential criminal and civil liability and/or disciplinary action for insider trading violations. Employees, agents and contractors of theCompany who violate this Policy are also subject to disciplinary action by the Company, which may include termination of employmentor of business relationship. All questions regarding the Company's Insider Trading Compliance Program should be directed to theCompany's Chief Financial Officer.I.Prohibition Against Short Selling of Company StockNo Company director, officer or other employee, agent or contractor may engage in short sales of the Company's securities. Ashort sale, as defined in this policy, means any transaction whereby one may benefit from a decline in the Company's stock price. Whileemployees who are not executive officers ordirectors are not prohibited by law from engaging in short sales of Company's securities, the Company has adopted as policy thatemployees may not do so.J.Public Reporting Requirements(i) General. Accounting and other business records are relied upon in the preparation of reports the Company files with certaingovernment agencies, such as the SEC. These reports must contain full, timely and understandable information and accurately reflectthe Company's financial condition and results of operations.(ii) Employee Responsibilities. Employees who collect, provide or analyze information for or otherwise contribute inany way in preparing or verifying these reports must strive to ensure that the Company's financial disclosures are accurate andverifiable, thus to enable stockholders and potential investors to assess the soundness and risks of the Company's business and financesand the quality and integrity of the Company's accounting and disclosures. The integrity of the Company's public disclosures depends onthe accuracy and completeness of the Company's records. To that end:a.All business transactions must be supported by appropriate documentation and reflected accurately in the Company's booksand records; in particular, no “side letters” or understandings, oral or written, that deviate from express contractual termsmay be entered into;b.No entry be made that intentionally mischaracterizes the nature or proper accounting of a transaction;c.No employee may take or authorize any action that would cause the Company's financial records or disclosures to fail tocomply with generally accepted accounting principles, the rules and regulations of the SEC or other applicable laws, rulesand regulations;d.All employees must cooperate fully with the Company's independent public accountants and counsel, respond to theirquestions with candor and provide them with complete and accurate information to help ensure that the Company's booksand records, as well as the Company's reports filed with the SEC, are accurate and complete; ande.No employee should knowingly make (or cause or encourage any other person to make) any false or misleading statementin any report filed with the SEC or other government agency, or knowingly omit (or cause or encourage any other person toomit) any information necessary to make the disclosure in any of the Company's reports accurate in all material respects.Any employee who becomes aware of any departure from these standards has a responsibility to report his or her knowledgepromptly to his or her manager or through the Open Door Hotline.K.Use of Company's Assets(i)General. Protecting the Company's assets is a key fiduciary responsibility of every employee, agentand contractor. Care should be taken to ensure that assets are not misappropriated, loaned to others, or sold or donated, withoutappropriate authorization. All Company employees, agents and contractors are responsible for the proper use of Company assets, andmust safeguard such assets against loss, damage, misuse or theft. Employees, agents or contractors who violate any aspect of this policyor who demonstrate poor judgment in the manner in which they use any Company asset may be subject to disciplinary action, up to andincluding termination of employment or business relationship at the Company's sole discretion. Company equipment and assets are to beused for Company business purposes only. With the exception of computers and cell phones (for which reasonable personal use isallowed, subject to the provisions in Subsection III (K) (iv) below), employees, agents andcontractors may not use Company assets for personal use, nor may they allow any other person to use Company assets. Employees whohave any questions regarding this policy should bring them to the attention of the Company's Human Resources Department.(ii)Physical Access Control. The Company has and will continue to develop procedures coveringphysical access control to ensure privacy of communications, maintenance of the security of the Company communication equipment,and safeguard Company assets from theft, misuse and destruction. You are personally responsible for complying with the level of accesscontrol that has been implemented in the facility where you work on a permanent or temporary basis. You must not defeat or cause to bedefeated the purpose for which the access control was implemented.(iii)Company Funds. Every Company employee is personally responsible for all Company funds overwhich he or she exercises control. Company agents and contractors should not be allowed to exercise control over Company funds.Company funds must be used only for Company business purposes. Every Company employee, agent and contractor must takereasonable steps to ensure that the Company receives good value for Company funds spent, and must maintain accurate and timelyrecords of each and every expenditure. Expense reports must be accurate and submitted in a timely manner. Company employees,agents and contractors must not use Company funds for any personal purpose.(iv)Computers and Other Equipment. The Company strives to furnish employees with theequipment necessary to efficiently and effectively do their jobs. You must care for that equipment and to use it responsibly only forCompany business purposes. If you use Company equipment at your home or off site, take precautions to protect it from theft ordamage, just as if it were your own. If the Company no longer employs you, you must immediately return all Company equipment.While computers and other electronic devices (including cell phones) are made accessible to employees to assist them to perform theirjobs and to promote the Company's interests, all such computers and electronic devices, whether used entirely or partially on theCompany's premises or with the aid of the Company's equipment or resources, must remain fully accessible to the Company and, to themaximum extent permitted by law, will remain the sole and exclusive property of the Company. You should not install any software onyour Company computer which has not been provided to you by the Company.To the extent permitted by applicable law, employees, agents and contractors should not maintain any expectation of privacywith respect to information transmitted over, received by, or stored in any electronic communications device owned, leased, or operatedin whole or in part by or on behalf of the Company. To the extent permitted by applicable law, the Company retains the right to gainaccess to any information received by, transmitted by, or stored in any such electronic communications device, by and through itsemployees, agents, contractors, or representatives, at any time, either with or without an employee's or third party's knowledge,consent or approval.(v)Software. All software used by employees to conduct Company business must be appropriatelylicensed. Never make or use illegal or unauthorized copies of any software, whether in the office, at home, or on the road, since doing somay constitute copyright infringement and may expose you and the Company to potential civil and criminal liability. In addition, use ofillegal or unauthorized copies of software may subject the employee to disciplinary action, up to and including termination. TheCompany's IT Department will inspect Company computers periodically to verify that only approved and licensed software has beeninstalled. Any non-licensed/supported software will be removed.(vi)Electronic Usage. The purpose of this policy is to make certain that employees utilize electroniccommunication devices in a legal, ethical, and appropriate manner. This policy addresses the Company's responsibilities and concernsregarding the fair and proper use of all electronic communications devices within the organization, including computers, e‑mail,connections to the Internet, intranet and extranet and any other public or private networks, voice mail, video conferencing, facsimiles,and telephones. Posting or discussing information concerning the Company's products or business on the Internet without the priorwritten consent of the Company's CFO is prohibited. Any other form of electronic communication used by employees currently or inthe future is also intended to be encompassed under this policy. It is not possible to identify every standard and rule applicable to the useof electronic communications devices. Employees are therefore encouraged to use sound judgment whenever using any feature of ourcommunications systems. The complete set of policies with respect to electronic usage of the Company's assets is located on theSanmina intranet site. You are expected to review, understand and follow such policies and procedures.L.Maintaining and Managing RecordsThe Company maintains a Records Retention Policy intended to ensure that Company records are retained only as long asrequired for the Company’s business operations or archival purposes, or to satisfy specific requirements including, but not limited toaccounting, audit, legal and tax requirements. Once the applicable retention policy has expired (and provided there is no legal hold onCompany records), Company records shall be promptly destroyed in accordance with the policy. Records include paper documents,CDs, computer hard disks, email, floppy disks, microfiche, microfilm or all other media. Furthermore, records also include personaldata, whether manual or automated, as defined under the national implementing legislation of European Directive 95/46/EC of theEuropean Parliament and of the Council of 24 October 1995 (“EU Data Protection Legislation”). The Company is required by local,state, federal, foreign and other applicable laws and regulations such as (but not limited to) the EU Data Protection Legislation to retaincertain records and to follow specific guidelines in the management, processing and disposal of its records. Civil and criminal penaltiesfor failure to comply with such guidelines can be severe for employees, agents, contractors and the Company, and failure to complywith such guidelines may subject the employee, agent or contractor to disciplinary action, up to and including termination ofemployment or business relationship at the Company's sole discretion.M.Records on Legal Hold A legal hold suspends all document destruction procedures in order to preserve appropriate records under special circumstances,such as litigation or government investigations. The Company's Legal Department determines and identifies what types of Companyrecords or documents are required to be placed under a legal hold. Every Company employee, agent and contractor must comply withthis policy. Failure to comply with this policy may subject the employee, agent or contractor to disciplinary action, up to and includingtermination of employment or business relationship at the Company's sole discretion.The Company's Legal Department will notify you if a legal hold is placed on records for which you are responsible. You thenmust preserve and protect the necessary records in accordance with instructions from the Company's Legal Department. RECORDSOR SUPPORTING DOCUMENTS THAT HAVE BEEN PLACED UNDER A LEGAL HOLD MUST NOT BEDESTROYED, ALTERED OR MODIFIED UNDER ANY CIRCUMSTANCES. A legal hold remains effective until it isofficially released in writing by the Company's Legal Department. If you are unsure whether a document has been placed under a legalhold, you should preserve and protect that document while you check with the Company's Legal Department.If you have any questions about this policy you should contact the Company's Legal Department.N.Political ContributionsThe Company reserves the right to communicate its position on important issues to elected representatives and othergovernment officials. It is the Company's policy to comply fully with all local, state, federal, foreign and other applicable laws, rules andregulations regarding political contributions. The Company's funds or assets must not be used for, or be contributed to, politicalcampaigns or political practices under any circumstances without the prior written approval of the Company's Legal Department and, ifrequired, the Board of Directors.O.Foreign Corrupt Practices Act The Company requires full compliance with the Foreign Corrupt Practices Act (“FCPA”) by all of its employees, agents, andcontractors.The anti‑bribery and corrupt payment provisions of the FCPA make illegal any corrupt offer, payment, promise to pay, orauthorization to pay any money, gift, or anything of value to any foreign official, or any foreign political party, candidate or official, forthe purpose of: influencing any act or failure to act, in the official capacity of that foreign official or party; or inducing the foreign officialor party to use influence to affect a decision of a foreign government or agency, in order to obtain or retain business for anyone, or directbusiness to anyone.All Company employees, agents and contractors whether located in the United States or abroad, are responsible for FCPAcompliance and the procedures to ensure FCPA compliance. All managers and supervisory personnel are expected to monitor continuedcompliance with the FCPA to ensure compliance with the highest moral, ethical and professional standards of the Company. FCPAcompliance includes the Company's policy on Maintaining and Managing Records in Section III (L) of this Code of Business Conduct andEthics.Laws in most countries outside of the United States also prohibit or restrict government officials or employees of governmentagencies from receiving payments, entertainment, or gifts for the purpose of winning or keeping business. No contract or agreementmay be made with any business in which a government official or employee holds a significant interest, without the prior approval of theCompany's Legal Department.P.Export ControlsA number of countries maintain controls on the destinations to which products or software may be exported. Some of thestrictest export controls are maintained by the United States against countries that the U.S. government considers unfriendly or assupporting international terrorism. The U.S. regulations are complex and apply both to exports from the United States and to exports ofproducts from other countries, when those products contain U.S.‑origin components or technology. Software created in the UnitedStates is subject to these regulations even if duplicated and packaged abroad. In some circumstances, an oral presentation containingtechnical data made to foreign nationals in the United States may constitute a controlled export. The Legal Department can provide youwith guidance on which countries are prohibited destinations for Company products or whether a proposed technical presentation toforeign nationals may require a U.S. Government license. Accordingly, you should check with the Legal Department in advance ofeffecting any offshore transaction that may raise concerns regarding compliance with U.S. export control laws.Q.Building SecurityIf you suspect any illegal activity, security breach (whether in fences, cages, attempts by unauthorized personnel to gain entryor otherwise), or dangerous situation, it is critical that you report the violation to management, the security guard or to your humanresources representative as soon as possible. In the event you come into contact with a person who doesn't have the appropriate badge orother credential, you should politely inquire as to the individual's business on the premises and, if unsatisfied with the response,promptly report the individual to the security guard and/or your human resources representative. In the event of an emergency, youshould dial 911 (if you are in the United States) or the appropriate emergency number (if you are outside of the United States).IV.RESPONSIBILITIES TO OUR CUSTOMERS AND OUR SUPPLIERSA.Customer RelationshipsIf your job puts you in contact with any Company customers or potential customers, it is critical for you to remember that yourepresent the Company to the people with whom you are dealing. Act in a manner that creates value for our customers and helps tobuild a relationship based upon trust. The Company and its employees have provided products and services for many years and have builtup significant goodwill over that time. This goodwill is one of our most important assets, and the Company's employees, agents andcontractors must act to preserve and enhance our reputation.B.Publications of OthersThe Company subscribes to many publications that help employees do their jobs better. These include newsletters, referenceworks, online reference services, magazines, books, and other digital and printed works. Copyright law generally protects these works,and their unauthorized copying and distribution constitute copyright infringement. You must first obtain the consent of the publisher of apublication before copying publications or significant parts of them. When in doubt about whether you may copy a publication, consultthe Legal Department.C.Selecting SuppliersThe Company's suppliers make significant contributions to our success. To create an environment where our suppliers have anincentive to work with the Company, they must be confident that they will be treated lawfully and in an ethical manner. TheCompany's policy is to purchase supplies based on need, quality, service, price and terms and conditions. The Company's policy is toselect significant suppliers or enter into significant supplier agreements through a competitive bid process where possible. Under nocircumstances should any Company employee, agent or contractor attempt to coerce suppliers in any way. The confidential informationof a supplier is entitled to the same protection as that of any other third party and must not be received before an appropriatenondisclosure agreement has been signed. A supplier's performance should generally not be discussed with anyone outside theCompany. A supplier to the Company is generally free to sell its products or services to any other party, including competitors of theCompany. In some cases where the products or services have been designed, fabricated, or developed to our specifications, theagreement between the parties may contain restrictions on sales.D.Government RelationsIt is the Company's policy to comply fully with all applicable laws and regulations governing contact and dealings withgovernment employees and public officials, and to adhere to high ethical, moral and legal standards of business conduct. This policyincludes strict compliance with all local, state,federal, foreign and other applicable laws, rules and regulations. If you have any questions concerning government relations, you shouldcontact the Company's Legal Department.E.LobbyingEmployees, agents or contractors whose work requires lobbying communication with any member or employee of a legislativebody or with any government official or employee in the formulation of legislation must have prior written approval of such activityfrom the Company's Legal Department. Activity covered by this policy includes meetings with legislators or members of their staffs orwith senior executive branch officials. Preparation, research, and other background activities that are done in support of lobbyingcommunication are also covered by this policy even if the communication ultimately is not made.F.Government ContractsIt is the Company's policy to comply fully with all applicable laws and regulations that apply to government contracting. It is alsonecessary to strictly adhere to all terms and conditions of any contract with local, state, federal, foreign or other applicable governments.The Company's Legal Department must review and approve all contracts with any government entity.G.Free and Fair CompetitionMost countries have well‑developed bodies of law designed to encourage and protect free and fair competition. The Company iscommitted to obeying both the letter and spirit of these laws. The consequences of not doing so can be severe for all of us.These laws often regulate the Company's relationships with its distributors, resellers, dealers, and customers. Competition lawsgenerally address the following areas: pricing practices (including price discrimination), discounting, terms of sale, credit terms,promotional allowances, secret rebates, exclusive dealerships or distributorships, product bundling, restrictions on carrying competingproducts, termination, and many other practices.Competition laws also govern, usually quite strictly, relationships between the Company and its competitors. AS A GENERALRULE, CONTACTS WITH COMPETITORS SHOULD BE LIMITED AND SHOULD ALWAYS AVOID SUBJECTS SUCH ASPRICES OR OTHER TERMS AND CONDITIONS OF SALE, CUSTOMERS, AND SUPPLIERS. Employees, agents or contractorsof the Company may not knowingly make false or misleading statements regarding its competitors or the products of its competitors,customers or suppliers. Participating with competitors in a trade association or in a standards creation body is acceptable when theassociation has been properly established, has a legitimate purpose, and has limited its activities to that purpose. Membership in tradeassociations should be approved in advance by the Legal Department.No employee, agent or contractor shall at any time or under any circumstances enter into an agreement or understanding,written or oral, express or implied, with any competitor concerning prices, discounts, other terms or conditions of sale, profits or profitmargins, costs, allocation of product or geographic markets, allocation of customers, limitations on production, boycotts of customers orsuppliers, or bids or the intent to bid or even discuss or exchange information on these subjects. In some cases, legitimate joint ventureswith competitors may permit exceptions to these rules as may bona fide purchases from or sales to competitors on non‑competitiveproducts, but the Company's Legal Department must review all such proposed ventures in advance. These prohibitions are absolute andstrictobservance is required. Collusion among competitors is illegal, and the consequences of a violation are severe.Although the spirit of these laws, known as "antitrust," "competition," or "consumer protection" or unfair competition laws, isstraightforward, their application to particular situations can be quite complex. To ensure that the Company complies fully with theselaws, each of us should have a basic knowledge of them and should involve our Legal Department early on if it appears that aquestionable situation may arise.H.Industrial Espionage It is the Company's policy to lawfully compete in the marketplace. This commitment to fairness includes respecting the rightsof our competitors and abiding by all applicable laws in the course of competing. The purpose of this policy is to maintain the Company'sreputation as a lawful competitor and to help ensure the integrity of the competitive marketplace. The Company expects its competitorsto respect our rights to compete lawfully in the marketplace, and we must respect their rights equally. Company employees, agents andcontractors may not steal or unlawfully use the information, material, products, intellectual property, or proprietary or confidentialinformation of anyone including suppliers, customers, business partners or competitors.V.WAIVERSAny waiver of any provision of this Code of Business Conduct and Ethics for a member of the Company's Board of Directors oran executive officer must be approved in writing prior to the proposed transaction by the Company's Board of Directors and promptlypublicly disclosed. Any waiver of any provision of this Code of Business Conduct and Ethics with respect to any other employee, agentor contractor must be approved in writing prior to the proposed transaction by the Company's Legal Department.VI.DISCIPLINARY ACTIONSThe matters covered in this Code of Business Conduct and Ethics are of the utmost importance to the Company, itsstockholders and its business partners, and are essential to the Company's ability to conduct its business in accordance with its statedvalues. We expect all of our employees, agents, contractors and consultants to adhere to these rules in carrying out their duties for theCompany.The Company will take appropriate action against any employee, agent, contractor or consultant whose actions are found toviolate these policies or any other policies of the Company. Disciplinary actions may include immediate termination of employment orbusiness relationship at the Company's sole discretion. Where the Company has suffered a loss, it may pursue its remedies against theindividuals or entities responsible. Where laws have been violated, the Company will cooperate fully with the appropriate authorities.You should review the Company's policies and procedures at the Sanmina intranet site for more detailed information.VII.ACKNOWLEDGMENT OF RECEIPT OF CODE OF BUSINESS CONDUCT AND ETHICSI have received and read the Company's Code of Business Conduct and Ethics. I understand the standards and policies containedin the Company Code of Business Conduct and Ethics and understand that there may be additional policies or laws specific to my job. Ifurther agree to comply with the Company Code of Business Conduct and Ethics.If I have questions concerning the meaning or application of the Company Code of Business Conduct and Ethics, any Companypolicies, or the legal and regulatory requirements applicable to my job, I know I can consult my manager, the Human ResourcesDepartment or the Legal Department, knowing that my questions or reports to these sources will be maintained in confidence. Name Signature Date Location (Facility)Please sign and return this form to the Human Resources Manager at your facility.Exhibit 21.1LIST OF SUBSIDIARIESEntity NameJurisdictionAET Holdings Ltd. (18)MauritiusAV BreconRidge Limited (1) (20)Hong KongBreconRidge Manufacturing Solutions (Asia) Limited (20)Hong KongContinental Circuits International, Inc. (3)BarbadosDavos Group Limited (5)British Virgin IslandsHadco Corporation (6)United StatesHadco Santa Clara, Inc. (3)United StatesPT Sanmina-SCI Batam (15)IndonesiaSanmina (B.V.I.) Ltd. (10)British Virgin IslandsSanmina Enclosure Systems Hungary Limited Liability Company (10)HungarySanmina Foreign Sales Corporation (6)BarbadosSanmina France SAS (7)FranceSanmina SAS (6)FranceSanmina-SCI (China) Limited (5)Hong KongSanmina-SCI (H.K.) Limited (5)Hong KongSanmina-SCI (Shenzhen) Limited (8)ChinaSanmina-SCI AB (6)SwedenSanmina-SCI Central Services (6)FranceSanmina-SCI Circuit (Wuxi) Co. Ltd. (8)ChinaSanmina CorporationUnited StatesSanmina-SCI Corporation (Malaysia) SDN BHD (4)MalaysiaSanmina-SCI Corporation Argentina SA (10)ArgentinaSanmina-SCI Corporation Africa (10)South AfricaSanmina-SCI Corporation Colombia S.A.S. (15)ColombiaSanmina-SCI Czech Republic s.r.o. (6)Czech RepublicSanmina-SCI de Mexico S.A. de C.V. (6)MexicoSanmina-SCI do Brasil Integration Ltd. (9)BrazilSanmina-SCI do Brasil Technology Ltda. (15)BrazilSanmina-SCI do Brazil Ldta. (6)BrazilSanmina-SCI Dutch Holdings, B.V. (15)NetherlandsSanmina-SCI Electronics Pte. Ltd. (14)SingaporeSanmina-SCI EMS Haukipudas OY (10)FinlandSanmina-SCI Enclosure Systems (Asia) Ltd. (2)Hong KongSanmina-SCI Enclosure Systems (Shenzhen) Ltd. (11)ChinaSanmina-SCI Enclosure Systems (Suzhou) Co. Ltd. (11)ChinaSanmina-SCI Enclosure Systems OY (6)FinlandSanmina-SCI Germany GmbH (13)GermanySanmina-SCI Holding (Thailand) Limited (10)ThailandSanmina-SCI Holding GmbH & Co. KG (6)GermanySanmina-SCI Holdings Australia Pty. Ltd. (15)AustraliaSanmina-SCI Hungary Electronics Manufacturing LLC (15)HungarySanmina-SCI Hungary Holdings Limited Liability Company (10)HungarySanmina-SCI India Private Limited (18)IndiaSanmina-SCI Ireland (16)IrelandSanmina-SCI Israel EMS Ltd. (15)IsraelSanmina-SCI Israel Medical Systems Ltd.(15)IsraelEntity NameJurisdictionSanmina-SCI Optical Technology (Shenzhen) Ltd. (19)ChinaSanmina-SCI Pte. Ltd. (18)SingaporeSanmina-SCI Real Estate Partnership (6)FranceSanmina-SCI RSP de Mexico S.A. de C.V. (6)MexicoSanmina-SCI Systems (Canada), Inc. (6)CanadaSanmina-SCI Systems (Kunshan) Co. Limited (8)ChinaSanmina-SCI Systems (Malaysia) SND BHD (10)MalaysiaSanmina-SCI Systems (Thailand) Limited (12)ThailandSanmina-SCI Systems de Mexico S.A. de C.V. (10)MexicoSanmina-SCI Systems Australia Pty Ltd (15)AustraliaSanmina-SCI Systems Holdings, Inc. (6)United StatesSanmina-SCI Systems Ireland Limited (10)IrelandSanmina-SCI Systems Israel Ltd. (15)IsraelSanmina-SCI Systems Japan, Ltd. (10)JapanSanmina-SCI Systems Singapore Pte. Ltd. (10)SingaporeSanmina-SCI Systems Tel Aviv Ltd. (17)IsraelSanmina-SCI Technology India Private Limited (18)IndiaSanmina-SCI Technology Limited (8)CaymanSanmina-SCI U.K. Limited (10)United KingdomSanmina-SCI/TAG de Mexico S.A. de C.V. (10)MexicoSaratoga Speed, Inc.United StatesSCI Brockville Corp (15)CanadaSCI Technology, Inc. (6)United States Annotation(1)A subsidiary of BreconRidge Manufacturing Solutions (Asia) Limited(2)A subsidiary of Davos Group Limited(3)A subsidiary of Hadco Corporation(4)A subsidiary of Hadco Santa Clara, Inc.(5)A subsidiary of Sanmina (B.V.I.) Ltd.(6)A subsidiary of Sanmina Corporation(7)A subsidiary of Sanmina SAS(8)A subsidiary of Sanmina-SCI (China) Limited(9)A subsidiary of Sanmina-SCI do Brasil Technology Ltda.(10)A subsidiary of Sanmina-SCI Dutch Holdings, B.V.(11)A subsidiary of Sanmina-SCI Enclosure Systems (Asia) Ltd.(12)A subsidiary of Sanmina-SCI Holding (Thailand) Limited(13)A subsidiary of Sanmina-SCI Holding GmbH & Co. KG(14)A subsidiary of Sanmina-SCI Pte. Ltd.(15)A subsidiary of Sanmina-SCI Systems Holdings, Inc.(16)A subsidiary of Sanmina-SCI Systems Ireland Limited(17)A subsidiary of Sanmina-SCI Systems Israel Ltd.(18)A subsidiary of Sanmina-SCI Systems Singapore Pte. Ltd.(19)A subsidiary of Sanmina-SCI Technology Limited(20)A subsidiary of SCI Brockville Corp EXHIBIT 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Board of DirectorsSanmina Corporation:We consent to the incorporation by reference in the registration statements on Form S‑3 (Nos. 333‑131360, 333‑61042, 333‑50282, 333‑39316,333‑95467, 333‑84221, 333‑84039, 333‑76279, and 333‑71313) and Form S‑8 (Nos. 333‑188085, 333-182042, 333‑172128,333‑165435, 333‑157099, 333‑84704, 333‑112605, 333‑108942, 333‑104692, 333‑100236, 333‑87946, 333‑83110, 333‑75616,333‑64294, 333‑39930, 333‑79259, and 333‑23565) of Sanmina Corporation of our report dated November 27, 2013, with respect to theconsolidated balance sheets of Sanmina Corporation as of September 28, 2013 and September 29, 2012, and the related consolidated statements ofincome, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended September 28, 2013, andthe related financial statement schedule, and the effectiveness of internal control over financial reporting as of September 28, 2013, which reportappears in the September 28, 2013 annual report on Form 10‑K of Sanmina Corporation./s/ KPMG LLP______________________Santa Clara, CaliforniaNovember 27, 2013 EXHIBIT 31.1CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302(A) OFTHE SARBANES-OXLEY ACT OF 2002I, Jure Sola, certify that:1.I have reviewed this Annual Report on Form 10-K of Sanmina Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recentfiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the Registrant's internal control over financial reporting; and5.The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theRegistrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controlover financial reporting.Date: November 27, 2013 /s/ JURE SOLA Jure Sola Chief Executive Officer (Principal Executive Officer) EXHIBIT 31.2CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302(A) OFTHE SARBANES-OXLEY ACT OF 2002I, Robert K. Eulau, certify that:1.I have reviewed this Annual Report on Form 10-K of Sanmina Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recentfiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the Registrant's internal control over financial reporting; and5.The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theRegistrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controlover financial reporting.Date: November 27, 2013 /s/ ROBERT K. EULAU Robert K. Eulau Chief Financial Officer (Principal Financial Officer) EXHIBIT 32.1CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICERPURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002Pursuant to the requirement set forth in Section 1350 of Chapter 63 of Title 18 of the United States of America Code (18 U.S.C. §1350), Jure Sola,Chief Executive Officer of Sanmina Corporation (the “Company”), hereby certifies that, to the best of his knowledge:1.The Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2013, to which this Certification is attached asExhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and2.The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations ofthe Company.IN WITNESS WHEREOF, the undersigned has set his hand hereto as of November 27, 2013. /s/ JURE SOLA Jure Sola Chief Executive Officer (Principal Executive Officer)This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of Sanmina Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.EXHIBIT 32.2CERTIFICATION OF PRINCIPAL FINANCIAL OFFICERPURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002Pursuant to the requirement set forth in Section 1350 of Chapter 63 of Title 18 of the United States of America Code (18 U.S.C. §1350), Robert K.Eulau, Chief Financial Officer of Sanmina Corporation (the “Company”), hereby certifies that, to the best of his knowledge:1.The Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2013, to which this Certification is attached asExhibit 32.2 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and2.The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations ofthe Company.IN WITNESS WHEREOF, the undersigned has set his hand hereto as of November 27, 2013. //s/ ROBERT K. EULAU Robert K. Eulau Chief Financial Officer (Principal Financial Officer)This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of Sanmina Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

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