Stephen J. Luczo – Chairman of the Board, President & Chief Executive Officer Patrick J. O’Malley – Chief Financial Officer & Executive Vice President Robert Whitmore – Executive Vice President Product and Process Development & Chief Technical Officer W. David Mosley – Senior Vice President Global Disc Storage Operations

Analyst for David Bailey – Goldman Sachs Sherri Scribner – Deutsche Bank Securities Keith Bachman – BMO Capital Markets Richard Kugele – Needham & Company Aaron Rakers – Stifel Nicolaus & Company [Jake Cominey] – Morgan Stanley Steven Fox – Calyon Securities (USA) Inc. Robert Cihra – Caris & Company Christian Schwab – Craig-Hallum Capital Scott Schmidt – Morgan Stanley [Nahal Chocksee – Technology Insight] Anthony Venturino – Federated Investors Stephen J. Luczo: On the call with me are Pat O’Malley, our Chief Financial Officer; Bob Whitmore, our Chief Technology Officer and Head of R&D and Head of Manufacturing Operations; and Dave Mosley, Head of Global Sales and Product Line Management. As we discussed last quarter, our management team is committed to accelerating the improvement in our operational and financial performance with the goal of returning to a sustained GAAP profitability as soon as possible. By focusing on our core competencies technology and manufacturing to achieve consistent product leadership, we are making meaningful progress in achieving this objective as reflected by our fiscal Q4 2009 financial results. We have improved the way we manage our product line to position us for profitable leadership based on performance, quality and costs. We have instituted better processes around factor utilization, demand generation and inventory management to more closely match supply with demand and with more linearity throughout the quarter. We are returning to the platform strategy to provide accelerated response to customer needs while leveraging our industry leading technical and manufacturing investments. Importantly, for our long term growth we have redeployed our technical resources to refocus on aerial density leadership across all of our products. And, as we previously stated, we will continue to make adjustments to our manufacturing infrastructure and to a broad based of organizational processes to further optimize capacity and profitability. The positive impact of these efforts is also reflected at the product level as evidenced by the recent announcements and customer acceptance in the 2.5 inch and 3.5 inch product lines which Dave and Bob will discuss shortly. During the last six months, demand for disc drives has been stronger than we planned at the beginning of each quarter. Our WIP inventory and our finished goods inventory in factory, transit and hubs are all at minimal levels. In addition, we have no indications of a buildup of inventory in the supply chain, at OEMs or at distribution as we close the June quarter or thus far in the September quarter. In addition, the enterprise market which has experienced a significant reduction in demand since June of 2008 is starting to exhibit signs of improvement. While over all visibility is improving, there is still the possibility for significant variability in our outlook for the September quarter and throughout fiscal year 2010. The growth in the TAM since December 2008 is encouraging and is indicative of the ever present need for storage devices across the customer base. Despite the relative strength shown in the first half of calendar 2009, as well as the fairly robust projections for the remainder of the year offered by some industry analysts, we are approaching the September quarter cautiously with respect to our production volumes and product mix. We continue to manage our factories with an intense focus on maximizing our return on invested capital through optimized inventory management while satisfying our customer requirements and still being able to appropriately respond to demand upsides if we have been too conservative in our growth expectations. Such upsides would result in improved financial performance relative to our outlook. Pat will discuss the company’s financial outlook in more detail shortly. While we are planning for modest sequential growth in September quarter with a TAM of 135 to 140 units and no significant share shifts, Seagate expects to continue to optimize our operational and financial performance with increasing revenues, gross margins and operating margins. As the overall demand for storage remains resilient, we believe that technology generally and storage in particular are proving to be structurally important even in the current depressed economic environment. As increasing amounts of content are created each day and the application environment broadens, the demand for storage continues its long term growth path in terms of terabytes required. For example, although the year-over-year industry TAM stayed relatively flat, the average capacity of a 3.5 inch ATA drive shift increased by 45%. In addition, the technology advancements of hard disk drives and other complementary storage products are creating new opportunities for Seagate in the home, in commercial enterprises of all sizes and a wide variety of mobile devices, all of which require highly reliable, affordable, accessible and connected storage. Seagate continues to offer customers the broadest disk drive product lines, as a result of our industry leading investment in technology and manufacturing resources. We believe that this breadth and scale of disk drive technology is critical to participating in the evolving opportunities presented by the mobile content rich connected world. With that, let me turn the call over to Dave to discuss specific market dynamics in fiscal Q4 and going in to fiscal Q1. W. David Mosley: Closing fiscal year with positive momentum is an encouraging sign that the actions we are taking to return Seagate to market leadership and profitability are working. Overall market demand for storage capacity has recovered faster than expected in spite of the economic conditions underscoring that the rapid creation of digital content and information has not slowed. Our core strategy going in to fiscal 2010 will be to focus on demand generation and product portfolio optimization for quality of share taking advantage of technology positioning in different markets and providing improved cost solutions for capacity points that service the market needs of our customers. Now, I’ll provide some commentary on Q4 and a look to Q1. Seagate shipped 40.6 million units in June quarter, up 6% sequentially. The overall industry shipped a total of approximately 132 million units during the quarter, essentially flat from the year ago quarter but markedly up by 17% quarter-over-quarter. Demand in all markets was fairly linear and steadily increasing throughout the quarter and we were able to appropriately respond to demand upsides. We transitioned to new more cost effective product platforms and experienced an improved product mix in all markets across our portfolio contributing to our margin growth. Relative to our prior expectations we believe we outperformed our competitors in these current product transitions. The June quarter was unique in that we have never seen calendar Q2 unit shipments significantly above calendar Q1. For this reason, we are closely monitoring the sell through in client markets specifically while we responded to customer demand. Now, I’ll give some detail on the individual markets, in the enterprise space, the total available market or TAM for the June quarter was approximately 5.9 million units which was up 5% quarter-over-quarter. Seagate shipped 3.6 million units in this space during the quarter. As we indicated last quarter we believe the enterprise TAM is stabilizing and now see further evidence that server shipments have begun to outstrip baseline enterprise equipment replacement rates. As a result for the September quarter we are expecting the overall enterprise market demand to be up slightly from the June quarter. Should market conditions improve more rapidly we will continue to have the capacity to fill upside demand. The TAM in the desktop market for the June quarter was approximately 54 million units, up 4% sequentially. Seagate maintained its leadership position in this market as we shipped 22 million units in the quarter essentially flat from the March quarter. Our 500 gigabyte per disk barracuda drives where we shipped roughly 9 million units are performing very well and receiving strong customer acceptance. For the September quarter we expect a modest increase in the desktop TAM sequentially. In the mobile compute space the overall TAM was approximately 55 million units in the June quarter up 27% sequentially and 23% year-over-year. Seagate’s shipments grew 27% sequentially to 11.3 million units. We continued to make solid progress during the quarter in our transition to 255 gigabyte per disk products in this market. In addition, we believe we have the leading share position in the growing 7200 RPM portion of this market. Overall, our customers are continuing to signal strong demand for our 2.5 inch products and we also expect further TAM growth in the September quarter. Now, I’d like to turn the call over to Bob to provide an update on our operations and product development.

This afternoon I will provide an update on products and technology as well as an outlook for capital spending in fiscal year 2010. As I’ve stated for the last several quarters, our primary focus has been to improve our new product time to market execution and accelerate our product transitions. We continue to make steady progress on both fronts and we’ll maintain our focus towards sustained product and technology leadership going forward. Last quarter I discussed the importance of product transitions as it relates to our gross margin recovery specifically, in the 7200 RPM 500 gigabyte per disk desktop and 5400 RPM 250 gigabyte per disk notebook products. Commensurate with our plan we were successful in transitioning the majority of our volume to these newer products which resulted in a positive impact to our gross margin as well as simplifying our factory output. In addition to these product lines, our 7200 RPM 250 gigabyte per disk 2.5 inch transition was well underway last quarter with a significant percentage of our 7200 RPM volume transitioning to this new platform. Over the next two quarters we will continue to focus our attention towards yield improvement, factory ramps and customer transitions as these new products will represent the vast majority of our production volume. Launching new products at the next aerial density point continues to be an important priority as well and several significant milestones were achieved in the June quarter. We delivered our aerial density leading 2.5 inch two disk 640 gigabyte drive to our US retail partners and will continue to ramp that product within this quarter. Capacity leadership in the external retail business is a high priority making this milestone significant. As for enterprise, last week we announced the availability of our 7th generation 15000 RPM Cheetah product with capacities up to 600 gigabytes. This is the latest addition in our industry leading enterprise product offerings. Qualifications are in progress with all of our OEM customers with many qualifications complete and shipping. Additionally, we completed several important qualifications of the industry’s first 2.5 inch 500 gigabyte nearline product given our customers a form factor option within this growing storage market. Our solid state product development is on track and we remain focused on delivering our first enterprise SSD later this calendar year. We are fully engaged with our customers and supply chain partners and remain committed to delivering solid state storage devices with the performance and reliability this market demands. Overall, we continue to focus our resources on time to market product and technology leadership as well as product transitions to [inaudible] our gross margin recovery. We are making steady progress and we’ll continue to have this as the highest priority. In regards to capital investments, we achieved the targets we communicated last quarter. Capital investments for the June quarter were $80 million and for the fiscal year 2009 totaled $633 million, slightly below our target of $650 million. The outlook for fiscal 2010 is unchanged as we believe we can manage our capital investments to approximately $450 million and still fund the necessary investments in our core technologies. As stated in previous communications we have sized our headcount and factory support structure commensurate with current level of demand and we will continue to evaluate the capital outlook as the demand environment evolves. We also continue to evaluate opportunities to optimize and increase the efficiency of our internal supply chain with the intention of improving our manufacturing cost structure, flexibility and customer response time going forward. In summary, the team remains focused on sustained product and technology leadership, maximizing our scale and leverage with Seagate components and optimizing our manufacturing structure. Now, I’d like to turn the call over to Pat O’Malley. Patrick J. O’Malley: You’ll find the company’s press release, 8K and additional financial information related to Seagate’s financial performance and other supplemental information in the investor relations sections of Seagate’s website at www.Seagate.com. I’ll start with the income statement then touch on the balance sheet and close with some additional commentary for our September outlook. For the June quarter, Seagate’s unit shipments were 40.6 million, up 6% compared to the prior quarter while down 6% compared to the year ago quarter. Revenue for the quarter was $2.35 billion above the upper end of our outlook as demand remained constant through the end of the quarter. Gross margins for the quarter expanded by approximately 1,000 basis points compared to the prior quarter due to a number of factors: one, a favorable pricing environment as supply and demand remained in balance and we had a stronger competitor product position; two, improved factory utilization due to higher overall demand; three, transition to the new products in notebook and desktop; and four, a modest recovery in the enterprise unit TAM. While I have called out each of these factors separately, many of these factors are interdependent and are a direct result of significantly higher overall unit demand that Seagate appropriately responded to without having to add capital or capacity. R&D and SG&A totaled $329 million for the June quarter, keeping us on track to achieve the targeted spending levels we previously communicated. During the June quarter we recorded an additional $85 million of restructuring related charges that substantially relates to the global headcount reduction actions we have undertaken during fiscal 2009. The tax provision for the June quarter was $27 million and was higher than expected due to discreet items unique to the June quarter primarily the liquidation of Maxtor corporate structures. We do not expect the discreet items impacting the book tax rate in the June quarter to increase the cash tax rate. For the past six months we have focused on strengthening the balance sheet and improving liquidity in large part to ensure we could address the debt that matures in the near term. With that task completed we are now in the process of developing a strategic plan to optimize the capital structure for the long term. At a high level, this will likely entail less long term debt and debt maturity profile that has more level than exists today. Now, for some comments specific to the balance sheet for the June quarter. Cash, cash equivalents, restricted cash and short term investments totaled approximately $2 billion at the end of the quarter, up $568 million from the previous quarter due to the debt offering we completed early in the June quarter that netted approximately $400 million in cash generated from operations. Restricted cash consists mainly of proceeds in escrow from a recent debt offering and cash in trust for the employee funded deferred compensation plan. By keeping the proceeds of our recent debt offering in escrow with our credit banks, we will be able to treat it as refinancing the existing debt rather than incremental debt for purposes of calculating our leverage covenant. Cash flow from operations was $192 million for the quarter while free cash flow as $11 million. The company paid in aggregate approximately $53 million in cash restructuring and interest during the June quarter. Depreciation and amortization for the June quarter was $224 million including approximately $20 million of purchase intangibles amortization. Cash conversion metrics were as follows: days sales outstanding was 40; days payable outstanding was 73; and days inventory outstanding was 27 for a cash conversion cycle of negative days, an improvement of six days compared to the prior quarter. It should be noted that during the June quarter we did not change payment terms. Looking forward, if shipments remain fairly linear during the quarter like we have experienced the last two quarters we’d expect the cash conversion cycle to be around zero days. Now, I will address the business outlook for the September quarter. While we continue to see signs of improved visibility, the ongoing uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters which makes it more likely that Seagate’s actual results could differ materially from current expectations. Specifically, the company expects the following: revenue to be approximately $2.4 to $2.6 billion; gross margins for the September quarter to improve approximately 200 to 350 basis points as compared to the June quarter. This improvement is predicated on the continued transition to the new product platforms and improved factor utilization rates. The guidance range for gross margin is larger than we would typically provide and this reflects the lower than historical visibility that still exists in the business today. R&D and SG&A costs are expected to be approximately $315 million. Other income expense to be a net expense of approximately $40 million and a tax rate for planning purposes of 6%. The September quarter outlook does not include the impact of any potential new restructuring activities, future mergers, acquisitions, financing, dispositions or other business combinations the company may undertake. That concludes my remarks for today. Stephen J. Luczo: On behalf of the management team I’d like to recognize our employees for their focus and commitment as we progress towards our goals and I’d also like to thank our customers, suppliers and partners for their ongoing support and confidence in Seagate. Operator, we’re ready to open up the call for questions.

(Operator Instructions) Your first question comes from Analyst for David Bailey – Goldman Sachs. Analyst for David Bailey – Goldman Sachs: On the topic of gross margin for the September quarter, you mentioned new products and utilization, going forward what do you think is the bigger swing factor if you will to influence on the gross margin line?

Going forward the new product transitions clearly will be the highest leverage. This last quarter we exited it running a little bit more than 50% of our products with the new products. We’ll continue to grow that at a much higher level the vast majority in the Q1 and that will be the accelerant driving that. As we fill our factories obviously, that leverage it will be maximized until the next step function. Analyst for David Bailey – Goldman Sachs: If I can follow up, you mentioned favorable pricing because supply demand and balance, how about conditions today in to the third quarter, do you think supply and demand are in balance in to Q3?

As we see it early in the quarter we see it continuing with the velocity we left the last quarter and so we’d say the supply demand is still in balance.

Your next question comes from Sherri Scribner – Deutsche Bank Securities. Sherri Scribner – Deutsche Bank Securities: I was hoping you could give a little bit of color on the consumer electronics market. I think you broke out the details for the other markets but I wanted to get a little sense of how the PBR market and the gaming market were doing? W. David Mosley: The gaming TAM was about 3 million units Sherri last quarter and the PBR market was fairly flat quarter-over-quarter. Sherri Scribner – Deutsche Bank Securities: Are you gaining share in the gaming market? W. David Mosley: No, not in the gaming market. Sherri Scribner – Deutsche Bank Securities: Then in terms of the balance sheet, can you just remind me do you guys have an accounts receivable facility? Did you sell any receivables in the quarter or is that all just pure working capital? Patrick J. O’Malley: This is pure working capital, we do not have a facility and none of our terms on that changed so that was just the DSO change was more of a mix between our [inaudible] and OEMs. But, the business was fairly linear so there was no difference than just normal collection and sale of our business model. Sherri Scribner – Deutsche Bank Securities: I’ll just sneak in one more, when do you guys expect to be below $300 million in op ex? Is that going to be happening in December or what is your expectation there considering the market is growing are you really going to need to be less than $300 million. Patrick J. O’Malley: Our target plans is to get to the $300 or below by the summer quarter. Sherri Scribner – Deutsche Bank Securities: So you’re still going to do that even with the better demand that you’re seeing? Patrick J. O’Malley: We’ll continue to monitor the business and invest appropriately where needed but right now that would be the trajectory we’re on.

Your next question comes from Keith Bachman – BMO Capital Markets. Keith Bachman – BMO Capital Markets: I had two if I could, I’ll through this out there for the team, the issue is I think there’s already some bare commentary circulating that inventories are starting to grow a little bit. The backdrop is IDC was recently out suggesting that the sequential change in the PC market was about 5% to 6%. You guys have indicated that you think the TAM was plus 17% quarter-over-quarter which is about what Intel suggests as well. How do investors take some comfort that there isn’t any inventory building, certainly it’s not on your balance sheet. And, I specifically wanted to just get some comfort on how deeply can you see in to the OEMs? Are you comfortable that there’s no inventories there that you’re not aware of since you’re on mostly JIT hubs? Then, I have a follow up please. Stephen J. Luczo: I think you hit it on the head which is from our perspective and as far as we can tell in the industry given what’s been reported that at least from the drive manufacturers perspective there’s not inventory buildup. So, we’re clearly building to our customers’ demand. You’ve also hit it on the head that some analysts for some reason are thinking that our customers are asking for too many products and being speculative on whether or not those products are sold through or not. Clearly, if they don’t have disk drives in them they’re not going to sell through, we know that for sure so if our customers are asking for our products and our inventories are at minimal levels as we’ve indicated that’s about the best we can do. To answer your question for where we can see in to different downstream in the supply chain and it’s variant obviously by customer and by type of customer, distribution is different than OEM and certain OEMs are different amongst each other but, as I indicated in my comments for what we can see we do not see the buildup in inventory that some of the, as you say, some of the bare side analyst have indicated. Now, that doesn’t mean that it might not happen but all we can do then is see where sell through is, adjust to our customer response quickly and then maintain supply and demand. I think the real question is how does the industry react if our customer base is overbought and I think it’s just an issue of then adjusting demand at that point and supply in line with demand at that point. Thus far though, we don’t see those signs. Keith Bachman – BMO Capital Markets: Steve you can see pretty well on the desti side, right? Stephen J. Luczo: We can see very well in to the desti side, we can actually see decently well in to certain of our customers and as we’ve indicated, the demand polls have continued strong. And, as you also indicated, we do see our JIT hubs and our JIT hubs have been pulled very aggressively. Keith Bachman – BMO Capital Markets: Then my follow us I think for Pat, number one is what do you think the weighted average ASP Pat will do sequentially? Then secondly, the cash flow was certain much better than I was anticipating, is there any color you could give us around expectations for September either cash flow from ops or free cash flow, however you want to characterize it? Patrick J. O’Malley: For the ASP I’ll try to do that one justice, as you can tell from our even Q3 to Q4 we’re trying to optimize capacity given where we’re at so we are certainly looking with obtaining somewhat of a product leadership again in the 2.5 and 3.5, we’re trying to optimize the higher capacity products to supply our customer needs because they’re still pulling hard on that. So obviously that mix would offset any pricing impact we’re planning for seasonal pricing this quarter. That’s our expectation here so I would say that we should be able to keep that ASP relatively flat [inaudible] upwards bias. That’s number one. Then, on the cash I think quite honestly, we’re running business week-to-week, that’s how we’re running it. The team sits down, looks where the inventory is, if it’s building up we cut back. It’s been fairly linear so if the business remains linear as it is, like I said the terms haven’t really noticeably changed for anything in our business so that was probably the biggest effect to our model and if it continues that way, we think we can keep that cash conversion cycle near zero. Obviously with the guidance we gave, we should generate cash flow so the cash balance should get healthier as the year progresses with this trajectory.

Your next question comes from Richard Kugele – Needham & Company. Richard Kugele – Needham & Company: Just a couple of quick questions, first just when you talk to the OEMs over the course of the June quarter did their visibility improve as your business was improving or have they been pulling at an improving rate but their visibility hasn’t gotten any better? How has their commentary to you changed over the course of the quarter? Stephen J. Luczo: Rich I think everybody is running their business, as Pat just described, fairly tight. I think the visibility has improved slightly. If I look at accuracy of forecast and so on as I go throughout the quarter, things have improved. But, there’s still a fair amount of tentativeness around, especially on specifics of mix and which products are desired and things like that. Richard Kugele – Needham & Company: Then kind of a little bit of a longer term question, we seem to be at a tipping point, certainly within the Seagate model from a mix perspective. I mean the growth in the units on mobile was profound, 11.3 is definitely material especially as a percentage of the total and with desktops being overtaken by notebooks at the very point where you finally have a window, seven potentially driven refresh aging infrastructure, all this stuff over the next 12 to 18 months that we’re going to be talking about, what do you think the Seagate mix looks like for fiscal 2010 between the major segments? Stephen J. Luczo: I think we’ll probably follow the market on the trends there. Obviously we’d like to push where we have strengths in technology or product mix, product alignment and we noted that relative to for example 7200 RPM on the notebook. But, I think in general we’ll follow the market. If that helps. Richard Kugele – Needham & Company: Do you think the supply chain is prepared for this type of mix? Stephen J. Luczo: Yes, I think people have been seeing it coming for quite some time and if anything, of late, just through the economic conditions that we’ve seen in the last year there’s been some flattening of the actual transition in the 3.5 inch side so I think the supply chain has been prepared.

Your next question comes from Aaron Rakers – Stifel Nicolaus & Company. Aaron Rakers – Stifel Nicolaus & Company: I guess first question, you’ve touched again on the whole SSD question of timing around end of 2009, I’m guessing calendar year at this point. I guess what I want to know is when does that start to – I guess is that timing just from an introduction perspective or when do we expect to see qualifications? Then I guess, any thoughts on the model implications at that point be it margin structure, etc.?

What I speak of at the end of the calendar year is really getting product in to OEM’s hands so they can start their qualification process so that’s really kind of the definition. Then, calendar year ’10 we’ll go through qualifications and ramp up any kind of volume that they need to fulfill their requirements. Hopefully, that gives you some clarity around the timing. Aaron Rakers – Stifel Nicolaus & Company: I guess if I can follow on that, in terms of the enterprise business in general I think there’s been some storage vendors out there that have started to implement technologies that allow tiering straight from an SSD to a SATA drive. I guess from a longer term perspective how do we think about the evolution of SSDs and potentially the erosion that could present on the traditional enterprise hard drive market? Stephen J. Luczo: I guess I’ll make an initial stab and then Dave can answer. I think basically the way we view it is that architecturally anything that makes storage more efficient or faster is a good thing for anyone involved in storage. SSD flash memory or whatever form of silicon can end up getting used is just super fast memory and if it’s fast then it needs a lot of data moving in and out of it. Is there applications where you could go from tier zero to tier II, I suppose there are but we happen to believe that probably the more prevalent enterprise architecture probably has some sort of staging of which data gets moved up closer to the SSD because you still have to have an application layer that’s monitoring what you’re throwing in to the SSD versus what you want to much with HDD so we think it’s an overall architecture. The engagement that we’ve had at the OEM level, I think that’s probably the biggest range of architectural diversity that is going on. I think that’s what we’re trying to allude to in terms of given our product line and the relationships that we have with the customer base that spans every major OEM we’re looking at nine or 10 different architectures that weigh different combinations of tier zero, tier I, tier II, SATA, SAS, fiber channel, grid, application driven, a variety of things and basically this is the battle ground that’s starting to be formed not among SSD versus HDD. That’s why for us we’re going after both markets. You could throw a couple of other technologies in there as well that involve silica or silicon and HDD but it’s really what’s starting to develop between the OEM spenders, the applications spenders, the server market place and storage subsystem market place. The answer is too common and its evolving and it’s going to be pretty dramatic I think over the next 15 years. In the meantime a lot of storage is going to be sold and a lot of that is going to be HDD and a lot of that is going to be SSD. Aaron Rakers – Stifel Nicolaus & Company: The final question for me is that in your gross margin guidance for this next quarter are you assuming a basic flattish mix in terms of enterprise as a contribution of your overall business? What I’m trying to understand is that as we look in to some stabilization and improving enterprise mix factors in your model, why shouldn’t we be thinking that there’s even a bit of upside relative potential to the gross margin guide you gave? Stephen J. Luczo: As I indicated in my comments, we are starting to see some traction in enterprise but what’s been baked in to the forecast that we outlined for you was sequentially marginally improvement there. So if it turns out that it’s more robust than the plans that we have you’d be right, we’d have a better earnings profile. Whether or not its enterprise or notebook 7200 or even some of our desktop products. But specifically to enterprise you’re right.

Your next question comes from [Jake Cominey] – Morgan Stanley. [Jake Cominey] – Morgan Stanley: I was wondering if you could just clarify your earlier comments about the debt structure and the long term strategy? Can you just talk a little bit more about how you are looking at that and what your trying to accomplish there? Stephen J. Luczo: I’ll answer that because as Pat was saying it I could see where it may have had a different feel than we were trying to say. The point was that when we came in a couple of quarters ago we clearly needed to sure up the balance sheet and make sure we had healthy cash position with respect to the debt obligations coming through as well as obviously investing in our technology and capital. We feel that through the debt offer that we did earlier this quarter, the June quarter, that we’re done on the capital raising side of any nature. So yes, it could have been implied that there was some other form of financing to be done and certainly that’s not the message we’re trying to send. What we do want to indicate though is that with the existing debt structure that we have now, you’ll notice that certain maturities are pretty peaky and while that debt is all at pretty low interest rates, especially in today’s market and probably particularly in the future markets if inflation does start to accelerate, it would be nice to level out that payment stream. Now, we can do that through virtual sinking funds and just putting cash off to the sides in our own minds or go out and buy some of those securities just so some of that debt is more level as we look out over the next five years or so. [Jake Cominey] – Morgan Stanley: So it’s kind of the 2011, 2012 time frame that you’re looking? Stephen J. Luczo: Yes, I’d say that you have that big peak in ’11, if we could bring that down in one form or another that would be just a better position for the company to be in. Like I said, that could also just be holding cash off to the side like a sinking fund knowing it’s there. But, we certainly would like – I call it the pumpkin diagram, right now we have a pumpkin smile and it would be nice to get some of those spiky teeth down. [Jake Cominey] – Morgan Stanley: Those 2011 bonds, those are not callable right? So, in order to reduce them you’d have to buy them back in the open market? Stephen J. Luczo: It’s just a function of availability and price. So, if we have the opportunity to buy some at prices we think are decent we will and if we don’t then we’ll just handle it like a sinking fund. [Jake Cominey] – Morgan Stanley: In terms of the revolver I think pretty much all of the revolver is currently drawn and that also matures in 2011? Patrick J. O’Malley: It’s effectively the same model. Stephen J. Luczo: That’s correct. [Jake Cominey] – Morgan Stanley: So would you look to try to just kind of refinance and extend that or how are you thinking about that maturity? Stephen J. Luczo: Again, a lot of flexibility and options with respect to the revolver.

Your next question comes from Steven Fox – Calyon Securities (USA) Inc. Steven Fox – Calyon Securities (USA) Inc.: You highlighted in the beginning of your presentation how the external market has become more of a priority. I was wondering if you can talk through some of the issues that have been facing the company, how you’re going to handle I would imagine what’s going to be sizeable demand for the fall relative to other areas and how that influenced the unit demand during the quarter? Stephen J. Luczo: I’m not sure what the reference is to with respect to the external market? Steven Fox – Calyon Securities (USA) Inc.: The external market to the retail side. Stephen J. Luczo: Right but, what comment did we make that you were referring to? Steven Fox – Calyon Securities (USA) Inc.: At the very beginning of the presentation I believe you said that the external market is a high priority. Stephen J. Luczo: Okay, the high capacity. I think what Bob indicated was, as you may have noticed in the quarter we announced the 640 gigabyte drive in the 2.5 inch form factor which went in to the retail market. What you’ll find is in the branded market, the high capacity products are particularly important in terms of getting shelf space at the big retailers. And of course, a lot of the high power users are always looking for max capacity. So, we view our ability to be successful overall in that business to be making sure that we’re participating in the high cap area which we hadn’t been for the last two years. It was probably one of the biggest weaknesses in our portfolio in our branded business. So, with that now in place, it’s a better position for us.

It’s still about 10% of revenue like we indicated previously and it’s fairly flat so the product positioning there is taking hold. But, relative to the backend of the year, I think we’re not seeing any tremendous growth in that segment, it’s fairly in line with the rest of the desktop and notebook growth. Steven Fox – Calyon Securities (USA) Inc.: And you would characterize that outlook in going with the market or how do you feel about your share? Stephen J. Luczo: Yes, we would characterize our positioning as going with the market.

Your next question comes from Robert Cihra – Caris & Company. Robert Cihra – Caris & Company: A couple of questions, headcount was up sequentially, it seemed a little surprising given your restructurings. On top of that two product questions, one just curious if you see yourselves or when you see yourselves getting reengaged in gaming a little more? Can that still be a good business or is that something that’s sort of a lowest priority? Lastly, on notebook you talked about the 640 gig 2.5 inch retail product, when do we see you think a 320 gig per [platter] notebook driver kind of for the PC OEM channel? Is that something that is sort of a late summer/fall type thing for notebook design cycle or is that something you even want to talk about yet? Patrick J. O’Malley: Let me take the headcount and then I’ll hand off to Dave for the remaining two of your questions. On the headcount we did exercise the restructuring activity in May. Many of those employees were still on the payroll until July so we have a cross over so some affect of the employees that we had to go through the action in May will be reflected in numbers. But also, with the upside of demand we certainly had the capacity in brick and mortar and tools in place but with the upside in demand most of that increase in headcount would be in labor in the Far East for responding to the upside. So, we had the tools in place so we just went through our hiring plan to bring back some of the folks required to build those products. So, from our cost structure, as I talked about earlier, with $329 op ex this quarter going to $315 and getting to $300, that’s still in line. That ties in our restructuring and as Bob mentioned we’re still looking at optimizing and [inaudible] our supply chain or manufacturing that’s still undergoing. But, most of the headcount you see are primary to the direct labor in the Far East for that increase. W. David Mosley: Rob, to get to the rest of your questions, the gaming market as I kind of alluded to in Sherri’s question there, the gaming market TAM was about 3 million units we think last quarter. It will go up substantially and some of that 3 million is of course staging for the consumer cycles that are coming in the back half of the year. We didn’t participate but we will to some small level this quarter so we are qualified. Its mainly low capacity product and so we’ve kind of chosen what we want to participate in. I think that should answer your question there. Then on the 320 gigabyte, we don’t want to get too far ahead of ourselves but we will be shipping out qualification units when the time comes and I think your characterization is fairly accurate as far as the time frame. Robert Cihra – Caris & Company: Do you see yourselves being, I mean obviously after 250 you’ve caught up nicely after the prior two cycles, do you see yourselves being pretty much either you or one other out in front substantially at 320 or is that something you think – if you had to guess do you see a big gap between yourselves and others or do you see a pack? W. David Mosley: We believe we’ll be competitive but it’s hard to tell what everyone else is doing but, we believe we’ll be competitive.

You next question comes from Christian Schwab – Craig-Hallum Capital. Christian Schwab – Craig-Hallum Capital: I just have three quick questions, just a follow up on that 640, the 320 I assume that’s 100% with your own heads?

We’ve been investing with TDK and Seagate so we qualified both heads with all our products. The retail drive that we’re shipping today is 100% with Seagate heads. I think that’s what you’re asking. Christian Schwab – Craig-Hallum Capital: Then in the September quarter if demand ends up being more robust, would you anticipate it to be on all fronts or would it be just enterprise, notebook, external storage, where do you think the greatest upside potential in September could come? W. David Mosley: It’s hard to read but I would say on all fronts that we saw last quarter. I mean, the trends would be the same probably. I don’t see one new segment coming up that would outstrip the others versus what we just saw quarter-over-quarter. Christian Schwab – Craig-Hallum Capital: My last question, the much talked about PC potential refresh cycle, your conversations with your customers over the course of the next year would you be willing to share your guys’ thoughts on how that may play out? Stephen J. Luczo: We’re still watching it very carefully. I think as things happen, especially through the fall here to judge, but we see pretty much what we would anticipate a seasonal growth further out in time. If that PC refresh cycle comes on and starts creating something that’s abnormal especially given what we’ve just been through with the gyrations in the TAM I think we’ll react to it. Christian Schwab – Craig-Hallum Capital: Lastly, on that note, would you express the same opinion as Dell that they would assume that servers would refresh first? Stephen J. Luczo: I think, as I noted in my comments before, there has been some movement up in servers off of the baseline call it equipment replacement rates. So, we do see that happening slightly right now. We’re aligned with Dell and Intel on their comments as well.

Your next question comes from Scott Schmidt – Morgan Stanley. Scott Schmidt – Morgan Stanley: Just a quick question, what was the biggest change from the June 24th update to today? You were forecasting 120 million units at that time and now you said the TAM was 132 million, what was the biggest change? W. David Mosley: I think from just at the very end of the quarter the continued pull in some of the notebook markets surprised people and it may have been a pull in from the current quarter but, it may be true demand upsides as well. I think that’s the thing we’re watching most carefully. I made a comment about that in the client markets and it happened right at the end of the quarter. Stephen J. Luczo: I think as we’ve indicated I think in all of our comments, we’re really focused on the inventory management side of our business and I think when we were that late in the quarter given where some of the projections were starting to accelerate pretty quickly we just felt it was more prudent to not assume that was going to happen or not build to it, depending on what that demand was really all about. Again, what we did see is kind of – and we actually talked to the same point in the March quarter you may remember and we got good pull through March in to April and we continued to get good pull through June and thus far in to July. So, it does seem that the industry has moved to a more linear model up and down the supply chain which I think has a lot of benefits that can offset the fact that the TAM has obviously been depressed a little bit as a result of the global turn down. Scott Schmidt – Morgan Stanley: Is there any build in the inventory or any restocking? I know you said it’s mostly end demand but have you seen inventories uptick at all or is this really all end demand? Stephen J. Luczo: It’s hard to tell from our perspective. We haven’t seen it build up certainly in our supply chain, that’s reflected in our numbers and downstream of us we haven’t seen it either. There’s still some time before all the back to school data is in and beyond. We’ll watch carefully but we haven’t seen it.

Your next question comes from [Nahal Chocksee – Technology Insight]. [Nahal Chocksee – Technology Insight]: Can you talk about any mix that you’re seeing in notebooks, especially with the commenced shipment of the CULV laptops? Stephen J. Luczo: I would say that the mix was fairly predicted by the Seagate numbers. In other words, we’re continuing to transition to 250 and 500 gigabyte per [platter]. There was some small uptick at the end in the lowest end, what I would call netbook segments. But, in general I think we haven’t really seen the impact of CULV yet. We’re watching carefully at what those lower capacity points. Some of the CULV may actually move upwards in capacity as well. [Nahal Chocksee – Technology Insight]: Have you seen any qualification activity with smartbooks? Apparently there’s about 40 OEMs, or 40 designs on the smartbooks, have you seen any of that yet? Stephen J. Luczo: It’s not really significant in the TAM numbers for last quarter or this quarter yet but I am aware of the activity.

Your next question comes from Anthony Venturino – Federated Investors. Anthony Venturino – Federated Investors: Just a quick question, by my calcs I think the overall debt number deceased by like $50 million, is that accurate? Patrick J. O’Malley: The overall debt number? Anthony Venturino – Federated Investors: Yes. Patrick J. O’Malley: We open market purchased $19 million of debt. Anthony Venturino – Federated Investors: The par value decreased I thought, is that accurate? Or, did you pay any debt down at all? Patrick J. O’Malley: No, we went open market and purchased $19.5 million last quarter. Anthony Venturino – Federated Investors: Of par or was that cash? Patrick J. O’Malley: Of par, we went and bought the April ’10 debt, $19.5 million in the open market. Anthony Venturino – Federated Investors: Can you say what price you bought it? Patrick J. O’Malley: It will come off the books at par. We don’t have any gains or loss. Stephen J. Luczo: All the debt is pretty much trading at market now. Patrick J. O’Malley: And we also had a facility with the China loan that we work from time-to-time, that was a $15 million payoff. So, that would be the only two elements we paid off during the quarter. Anthony Venturino – Federated Investors: Is debt buyback something you are considering or is that just kind of when the price is right you might do it. Stephen J. Luczo: As Steve said it’s in the market and if the price is right and we have an opportunity, we’ll exercise it opportunistically. We don’t have a formalized program but if the market does trade it and it’s a good price and it’s a fair price, as Steve said, we’re looking to take some of these peaks off of our debt and we’ll look to those areas as well. But, we have $300 million due on October 1st and then we have another tranche, about another $19 million due in April so this next fiscal year we have close to $500 million due that we’ll service as it comes due.

Your last question comes from Richard Kugele – Needham & Company. Richard Kugele – Needham & Company: Just quickly, when it comes to the discreet track recording and the [inaudible] patterned media, do you have any thoughts on the timing especially in light of a 45% year-over-year improvement in aerial density? What’s your thoughts there?

Well, you know we’re investing in a number of different technologies, you mentioned a couple of them. We see conventional perpendicular recording expending for the next several generations. We’re making investments so that we’ll be ready for the conversion but we don’t see that for a number of years in front of us. Stephen J. Luczo: I just want to take the opportunity to thank everybody for joining us on the call today and we look forward to speaking with you next quarter.

This concludes today’s conference call. You may now disconnect.