Stephen J. Luczo - Chairman of the Board, President, Chief Executive Officer William David Mosley - Executive Vice President - Sales, Marketing and Product Line Management Robert W. Whitmore - Executive Vice President - Product and Process Development, Chief Technical Officer Patrick J. O'Malley - Chief Financial Officer, Executive Vice President

Kathryn Huberty – Morgan Stanley Richard Kugele – Needham & Company David Bailey – Goldman Sachs Mark Moskowitz – JP Morgan Jayson Noland - Robert W. Baird Ananda Baruah - Brean, Murray, Carret & Co. Scott Craig - Bank of America, Merrill Lynch Aaron Sharma – UBS Kevin Hunt - Unidentified Company Aaron Rakers – Stifel Nicolaus Keith Bachman - BMO Capital Markets

Good afternoon, ladies and gentlemen, and welcome to Seagate Technology's fiscal first quarter financial results conference call. (Operator's Instructions) As a reminder, this conference is being recorded for replay purposes. This conference call forward looking statements including, but not limited to, statements related to the company’s future financial performance. These forward looking statements are based on information available to Seagate as of the date of this conference call, but are subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated by these forward looking statements. Information concerning additional factors that could cause results to differ materially from those projected in the forward looking statement is contained in the company’s annual report on Form 10-K as filed with the US Securities and Exchange Commission on August 19, 2009. These forward looking statements should not be relied upon as representing the company’s views as of any subsequent date and Seagate undertakes no obligation to update forward looking statements to reflect the events or circumstances after the date they were made. I would now like to turn the conference over to host, Mr. Steve Luczo, CEO. Please proceed, sir. Stephen J. Luczo: Thank you. Good afternoon, everyone, and thank you for joining us today. 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 Manufacturing Operations, and Dave Mosley, Head of Sales and Product Line Management. The strong operational and development performance for our fiscal first quarter returned us to profitability ahead of schedule. The results exceeded our expectations at the beginning of the quarter and were positive relative to what we outlined in our preannouncement on September 22nd. Throughout the quarter we experienced improving demand across our end markets, despite a macroeconomic environment that remains challenging. We believe that our strong operating and financial results reflect our continued focus on operational excellence and reestablishing our time to market leadership and key product offerings. We remain focused on leading in technology and manufacturing and optimizing our broad product portfolio for profitability. As we've discussed previously, our market strategy is to pursue quality of share, optimizing the product portfolio and manufacturing capacity for profitability and return on invested capital as opposed to simply pursuing unit volume share. We achieved revenue of $2.66 billion which is at the high end of our revised expectations for the quarter and we more than doubled our net income year over year, despite the difficult economic conditions. We are also pleased with our operating cash flow of $278 million during the quarter and with reducing our debt by $685 million during the fiscal year. We achieved gross margin of 24.5% as we successfully transitioned to our new products in the notebook and desktop markets and realized efficient capacity utilization throughout our manufacturing infrastructure. Importantly, we were able to achieve this margin even though the mission critical enterprise space has not returned to historical levels. For reference, mission critical enterprise drive shipments for the industry were 24.9 million units for the first nine months of calendar 2008 versus 18.2 million units for the same period of calendar 2009. We are expecting this market to gradually improve in a December quarter, however, we are prepared from a product offering, capacity planning, and supply chain perspective to respond to more meaningful growth if necessary. Additionally, while not included in our TAM outlook or longer-term planning as of now, we believe that the Windows 7 transition is increasingly likely to result in a replacement cycle that has the potential to accelerate growth for PCs in calendar year 2010. In light of the overall demand for storage over the last few quarters, the disk drive industry appears to be more resilient to the current macroeconomic slowdown than many others impacted by the global downturn. As such, looking ahead, we estimate the TAM for the December quarter to be between 153-160 million units. Should the TAM reach the high end of this range or beyond, we believe it may be difficult for the industry to fully respond to these demand levels due to potential component constraints. During the last three fiscal years, Seagate has invested $2.5 billion of capital throughout its manufacturing and development infrastructure, over two thirds of which was investing heads in media capacity and technology. These investments in our key underlying technologies have allowed Seagate to meet increases in customer demand in the near term with relatively low additional capital investment. Given our breadth of product offerings and customer relationships, we have unique visibility to this demand which we view as a competitive advantage as it relates to future products, capacity, and capital investment. While we anticipate making capacity additions thoughtfully in the coming quarters, our objective remains to maintain a balance of supply and demand while optimizing our production volumes and product mix to meet customer needs. With that let me turn the call over to Dave to discuss specific market dynamics in fiscal Q1 and going into fiscal Q2.

Thanks, Steve. Entering our first fiscal quarter for 2010, we saw a strong overall demand for storage and that trend continued throughout the September quarter. We executed well to our strategy of focusing on quality of share by leveraging the improved cost structure of our broad optimized product portfolio. This resulted in strong performance across all of our product lines and sales channels. Seagate shipped 46.3 million units during the quarter, representing 14% sequential growth. We believe the overall industry shipped 153 million units. During the quarter, customers continue to transition to our newer, more cost effective, and higher capacity products, and we tactically responded to customer upsides. Additionally, supply and demand were relatively in balance which resulted in a stable price environment. These factors combined with a higher than expected unit demand drove continued margin improvement. Now I'll give some detail on the individual markets. In the Mission-Critical space, the TAM for the September quarter was approximately 6.7 million units, up 13% quarter over quarter and down 19% year over year. Seagate shipped 4 million drives for Mission-Critical server and storage products during the quarter maintaining its leading share position. This represents a healthy increase from fiscal Q4 to Q1, but it's still markedly lower than the 5.2 million units Seagate shipped in the year ago quarter. As such, we believe there is still opportunity for growth in this market should a refresh occur, and expect that with our leading Mission-Critical product line, we will benefit from this growth. For the December quarter, we expect the demand for Mission-Critical drives to be up seasonally. Seagate's SSD program is progressing on schedule. We began production in shipped revenue units in September and customer response has been very favorable. To meet customer requirements, the initial product in Seagate's SSD portfolio is targeted at the broad volume server market and has a SATA interface. We are actively engaged with our enterprise customers and are developing additional products with the entire spectrum of interfaces and performance options required to fully serve this market. Our product development plan enables us to emphasize endurance, reliability, and performance for SSDs at the same level of enterprise expertise customers have come to expect from Seagate. The TAM in the desktop market for the September quarter was approximately 58.4 million units, up 7% sequentially. We believe we maintained our leadership position in this market, shipping 23.3 million units up 6% from the June quarter. We continued to see strong demand for our 500 GB per disk Barracuda drives where we shipped over 14.5 million units. Additionally during the quarter we launched the industry's first 6GB/second SATA desktop hard drive Barracuda XT, which is designed for high performance PC gaming and video applications. For the December quarter we expect the desktop TAM to be flat to slightly up sequentially. In the mobile compute space, the overall TAM was approximately 70.6 million units in the September quarter, up 28% sequentially and 32% year over year. Seagate shipped 13.9 million units, an increase of 22% sequentially and 41% from the year ago quarter. During the quarter we benefited from our leadership position and execution in delivering 250 GB per disk products and 7,200 RPM products. The customer base for our 2.5 inch mobile drives continues to expand as the system price bands have broadened throughout the netbook and notebook markets. We expect the TAM in the mobile compute space for the December quarter to be up sequentially. Now I would like to turn the call over to Bob to provide an update on our operations and product development. Robert W. Whitmore: Thanks, Dave. This afternoon I will provide a brief update on products and operation. For the past three quarters I've primarily focused my comments on new product, time to market, and the acceleration of our product transitions. In addition to providing a product update, today I will also comment on operational performance regarding supply, factory utilization, and capital investments. We continue to make steady progress in the area of new product execution and product transitions. Our desktop 500 GB per disk and notebook 250 GB per disk product line transitions are complete, fully ramped within our factories, and well accepted by our customers. As for the new enterprise products, our industry first 500 GB 2.5 inch Nearline product and 600 GB 3.5 inch 10,000 RPM product lines are fully qualified and ramping within the qualified. Our 600 GB 3.5 inch 15,000 RPM product line will be largely qualified by the end of the quarter with many OEM customers qualified and in volume production today. Overall product transition execution is going well and will remain a high priority. In regards to our new product introductions, we continue to focus on time to market across the portfolio. As stated last quarter, we delivered our 2.5 inch two disk 640 GB product to our retail partners. This quarter we are focused on qualifications with our OEM customers and increasing the factory output. We also began shipping our 1 TB 2.5 inch retail product and will continue to increase volumes this quarter. Finally, we have now started the qualification process of the industry's first 2.5 inch 7 mm high hard disk drive. This new slimline product allows our OEM customers to continue to reduce the thickness and weight of their notebook platforms. Seagate is committed to supporting our customers with the fullest range of form factors, spin speeds, and interfaces, and as a result remains the storage supplier of choice. In summary, we believe that we have made significant progress in the last three quarters with regards to new product, time to market delivery, product line transitions, and factory deployment. These efforts have had a positive impact on our growth margins and will remain the highest priority for the team in the coming quarters. Now I'll give some details as it relates to operations. As was mentioned earlier over the last three years, Seagate has invested $2.5 billion of capital throughout its manufacturing and development infrastructure. These investments have allowed us to upgrade our internal component tool capabilities to the latest generation of technology and positioned us well for future technology and product transitions. As a result of this industry leading capital investment, the company has been able to respond to the increasing unit demand since January while minimizing additional capital investment. The volume increases of our new time to market products combined with an improving demand environment for hard disk drives has increased our factory utilization to very high levels and provided meaningful scale and leverage throughout the internal supply chain. As we move forward, we'll continue to work closely with our customers and make the appropriate capital investments. In light of the robust demand for HDDs over the last nine months, and the increasing likelihood of a gradual macroeconomic recovery, we're in the process of evaluating our capital investment levels for calendar year 2010. With respect to the overall supply chain, we believe we are well positioned to meet the near term demand. However, similar to our manufacturing capacity, we are monitoring this closely and working with our suppliers in order to appropriately support any increased demand. In August we announced plans to close our AMK factory in Singapore and move the hard disk drive manufacturing operations to other Seagate locations. This action is one part of an overall strategy intended to enhance flexibility within our factories, improve manufacturing leverage, and reduce our overall cost structure. The annual run rate savings of approximately $40 million is expected to be achieved when the transition is completed at the end of calendar 2010. In summary, the results of the September quarter demonstrate the powerful impact on our financial results from product and technology leadership and optimized manufacturing structure, and a flexible supply chain. Now I'd like to turn the call over to Pat O'Malley. Patrick J. O'Malley: Thanks, Bob. You'll find the company’s press release, 8-K, and additional financial information related to Seagate's financial performance and other supplemental information in the investor relations section website at seagate.com. I'll start with some comments regarding the fiscal Q results, then touch on the balance sheet, and close with additional commentary regarding our outlook. For the September quarter, Seagate's unit shipments were 46.3 million, up 14% compared to the prior quarter and down 4% compared to the year ago quarter. Revenue for the quarter was $2.66 billion, up 13% from the previous quarter and down 12% year over year. Gross margin for the September quarter expanded to 24.5%, an increase of roughly 700 basis points compared to the prior quarter to the continued transition to new products, improving product mix, and improving factory efficiencies and utilization. R&D and SG&A totalled $314 million for September quarter. Favorability due to R&D materials spending moving into future quarters was essentially offset by charges associated with the partial restitution of salaries previously subject to the companywide salary reductions implemented last January and the cost of performance based variable compensation plan. During the September quarter we recorded $46 million of restructuring charges that relate to the closing of the AMK facility in Singapore and to the global reductions we initiated during fiscal year 2009. Additionally, we wrote down $64 million of research related fixed assets this quarter. This charge is reflected on the income statement line item impaired of long-lived assets. The tax provision for September quarter was $1 million better than expected due to favorable adjustments related to the company's valuation allowance for deferred tax assets and other tax adjustments. As these adjustments are nonrecurring, we continue to use a tax rate of 6% for planning purposes. Because the company was profitable on a GAAP basis for the September quarter, outstanding options that are in the money are now included in the diluted share calculation which accounts for the majority of the diluted share account increase as compared to the last quarter. Going forward, the diluted share count will vary somewhat based on the number of stock options in the money which is determined by the average price of the stock for the quarter. Now I'd like to address the balance sheet. Since the beginning of our fiscal year, including activity up through October 19th, we have reduced debt by approximately $685 million. The debt reduction was comprised mainly of $300 million paid to retire the senior unsecured floating rate notes at maturity and $350 million to pay off our revolving credit facility. We have made significant progress in regards to our capital structure as our net debt position is now less than half of what it was at the beginning of the calendar year. Cash, cash equivalents, restricted cash, and short term investments at the end of the quarter totalled approximately $1.8 billion, down $257 million from the previous quarter due primarily to the debt reduction activities I just mentioned offset by cash generated from operations. Cash flow from operations was $278 million for the quarter while free cash flow was $189 million. The company paid approximately $107 million in cash restructuring and interest during the September quarter. Depreciation and amortization for the September quarter was $204 million, including approximately $10 million of purchase intangibles amortization. Cash conversion metrics were as follows; days sales outstanding was 42, days payable outstanding was 75, and days inventory outstanding was 28, for a cash conversion cycle of -5 days. Looking forward if shipments remain fairly linear during the quarter, we'd expect a cash conversion cycle to be around zero days. Now I will address the business outlook for the December quarter. While visibility has improved throughout the calendar year, the ongoing uncertainty in global economic conditions makes it difficult to predict product demand and other related matters, which makes items more likely that Seagate's actual results could differ materially from current expectations. Specifically for the December quarter, the company expects the following; revenue to be approximately $2.75-$2.85 billion, gross margin for the December quarter to be near the high end of the new target range of 22%-26%, R&D and SG&A costs to be approximately $335 million, higher than what we expected at the beginning of the calendar year. The bulk of the increase is a direct result of the company returning to profitability. As such, we are addressing salaries and variable compensation sooner than we expected. We believe opportunities still exist to improve efficiencies in our operating expense structure that will, over time somewhat offset the cost of restoring salaries and variable compensation. Other income expense to be a net expense of approximately $35 million, a tax rate for planning purposes of 6%, and an outstanding share count of approximately $520 million. The December 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. The company's policy is to refrain from commenting on any such activities. Now I would like to provide an outlook for fiscal year 2010. We felt it was time to update our view of the longer-term financial model in light of the progress the company has made since the beginning of the calendar year. Some examples of this progress are evident in our improved time to market delivery of products, our significantly lower cost structures, and our improved decision making processes. Before I review the financial outlook, it is important to understand some of the critical assumptions on which we have based our fiscal year 2010 modeling, and then I will provide a perspective on how these will reflect on Seagate's financial results. The fiscal year 2010 financial model is based on the following key assumptions; the unit TAM will grow roughly 10%-15% over fiscal year 2009, there will be a return to as seasonal pattern in demand, pricing trends will reflect a balance supply and demand environment, and Seagate will continue to deliver time to market products. With these key assumptions, we believe that fiscal year 2010 revenue will be greater than $10.5 billion while diluted GAAP earnings per share would be in excess of $1.90 which includes approximately $155 million or $0.30 per share of restructuring costs, asset write downs, and amortization of purchase intangibles. Inherent in any long-term financial modeling is the potential of significant variability in the outcomes due to unforeseen changes in demand and pricing environment. Specifically, while we are not expecting another large scale global economic slowdown, neither have we factored in corporate refresher PCs or a rapid recovery in the Mission-Critical market for hard drives. The point is there are many factors, both positive and negative, that could cause our fiscal year 2010 results to deviate from this model. We look forward to updating you on these factors as the fiscal year progresses. That concludes my remarks for today. Steve? Steve: Thanks, Pat. We're continuing to make progress on a number of fronts and I want to thank our employees around the world for their continued focus towards achieving our goals. I'd also like to thank our customers, suppliers, and partners, for their ongoing support and confidence in Seagate. With that we're ready to open up the call for questions.

(Operator's Instructions) And our first question will be from the line of Kathryn Huberty. Kathryn Huberty – Morgan Stanley: Yes. Thanks, good afternoon. A question on the guidance for the December quarter. If we look at the fundamental sin the industry, HDD inventory is at least two year loads, PC inventory is very low heading into the Windows 7 launch on Thursday. And on top of that we have improving command in both the consumer and enterprise markets. So I guess if you can take those fundamentals and compare it to the guidance which is suggesting that units grow at less than normal seasonality in December. Patrick J. O'Malley: Let me take that, this is Pat. Number one, as we talked about the TAM, we believe at a certain level — that over 160 there may be supply constraints. I think the industry will work its best to hit any upside that may occur there, but also given the linearity and the needs of our OEMs and distributors throughout the quarter, going over 160 million may be a challenge. So I think what you are getting there is a big of an industry, and maybe Seagate at a certain level constraint, that may not be able to respond to all actions. Stephen J. Luczo: Yeah. And I think the other thing is that from a planning perspective, I think the industry obviously is pretty cognizant of what happened a year ago December. So speaking about seasonality of December quarter versus September quarter and December quarter to March quarter I think hopefully is something we can return to. I guess we'll learn this year whether or not we can, but obviously last December things looked great up until the first week of December and then with the slowdown that really occurred in many other sectors that started six or seven months before that. It really impacted the technology industry late in the quarter. So I think we also have to be cognizant of that and plan conservatively in case the summer isn't a three month quarter. If it is then I would say your comments are more accurate and then there's the question of whether or not the industry can respond to that. A lot of that will have will have to do with linearity and pulls through the quarter so we're obviously keeping a close eye on it. Kathryn Huberty – Morgan Stanley: Let me ask a more specific question. OEM mix is back to peak levels in the quarter. What's your view as to whether OEMs pulled forward seasonal demand as they built product ahead of Windows 7? Do you think there was pull forward or do you think the inventory levels have been managed appropriately? Stephen J. Luczo: I think the inventory levels are managed appropriately. We have visibility to our jet hubs, but we have no indications that there is buildup of demand at the OEMs. Kathryn Huberty – Morgan Stanley: Okay. And then just lastly, is glass supply still the biggest constraint for the industry, and have you or others brought on additional suppliers to fix that? Stephen J. Luczo: Well, we wouldn't talk to our specific supply strategy, but from a glass perspective, we feel comfortable with our supplies. Kathryn Huberty – Morgan Stanley: Okay great. Thanks so much, guys.

Thank you. Our next question will be from the line of Richard Kugele from Needham & Company. Please proceed. Richard Kugele – Needham & Company: Thank you. Good afternoon. Two questions, I guess first in terms of capacity additions, you seemed to pose to run effectively fully utilized in the December quarter, and if you kind of look at the PC industry, analysts forecasts, they're suggesting something in the low double-digit range for calendar 2010. Traditionally drives have been a couple of points higher than that. So if we think about your ability to expand capacity in a timely fashion to hit that number, when do you have to make those decisions and what's kind of the drop-dead date to actually have it be meaningful for the year? Stephen J. Luczo: Yeah. A gain, Rich, what I was trying to point out in my comments, given our position in the industry and the breadth of our product portfolio and the breadth of our customer mix, we actually think that's highly competitive in information. So I don't think we can give you a whole lot more guidance other than, as you point out, if the industry grows at double digit rates for 2010 relative to what we've told you about where we're at now and where we think the industry is out, it would mean deploying capital prudently, and deepening on lead times that could occur early in the year and throughout the year. Richard Kugele – Needham & Company: Okay. Then I guess just lastly from a much more recent quarter balance sheet perspective, virtually every category of your inventory from a raw material perspective and a finished goods perspective is dramatically less than it's been over the past couple of years. How were you able to really do that to be able to hit the kind of unit numbers you've been able to do, is your supply chain just a little bit more streamlined or are you just effectively managing your factories that much better to have, in some cases, a 50% reduction? It was a pretty material number, that's why I asked. Stephen J. Luczo: I think there's a few things. I mean, one is we've spoken to linearity so the customer linearity has been significantly different than any time in the 20 years I've been in the industry and I think we talked to this a couple of quarters ago that maybe one of the good things that came out of the pulling out of so much credit is that companies aren't tearing as much inventory and they're ordering products sooner in and flowing revenue more evenly throughout a quarter, which of course if you're a high volume manufacturer it makes a big difference. I think second thing is with respect to Seagate relative to where we're at in the beginning of the year versus now is just the mix of products that was in the factories. It was a pretty complicated mix with several variations and generations earlier in the year and because of the success of the new products we've basically been able to transition to a much narrower set, if you will, in both the notebook and desktop segment as well as the new enterprise class products. So our factories are running, I would say a lot more efficiently because the product set is a lot less complicated. And then thirdly, yeah, I do think we have excellent relationships in the supply chain. Obviously some of those are internally controlled and some of those are significant external relationships that we've had and we've continued to, I think, improve in that front. Richard Kugele – Needham & Company: Okay. Actually I have one last question. When it comes to the fiscal 2010 guidance, just a clarification, you are saying that the $2.20, that does not include the rapid recovery and enterprise or a corporate refresh of PCs.

That's correct. Stephen J. Luczo: That's correct. Richard Kugele – Needham & Company: Okay. Thank you very much.

Thank you. And our next question comes from the line of David Bailey from Goldman Sachs. Please proceed. David Bailey – Goldman Sachs: Great. Thank you very much. Could you let us know what you think the most important drivers of growth margin are at this point and how should we think about the plusses and minuses to gross margin as we move into sort of the margin June quarter? Patrick J. O'Malley: Well, obviously the product mix of the old and new is the key driver. It has been the key driver since we've been shedding the old products to the new starting with the lull of March and continuing. We wound up well over 80% of the new products, so obviously that leverage is getting diminished as we go to 100%, but it's certainly been a key driver. The element that can't be discounted is the overall TAM which is, as Steve talked about, not just our factories being more efficient with the products, but they're being highly utilized. So our factories are probably at the highest level of utilization. So if you look what are going to be the drives in the future, obviously we haven't talked about an enterprise. We still have opportunities in yields in these new products that will be driving us into next quarter and beyond, some of the new enterprise products that will be in issue, and just the normal cost reduction. So we still feel there's tailwind into the margin structure, but obviously we've captured a lot of that, we captured it earlier, and it's been primarily to the products and where the factories are. So I think that's how we would look at it going forward. And as I characterized it, there is an enterprise refresh, PC refresh, obviously there's some opportunity there, but we're not planning on that right now. David Bailey – Goldman Sachs: Okay. And then when you look at your debt levels, are you comfortable where you are right now or is there more work still to be done? And maybe more broadly, what are your priorities for your cash next year? Patrick J. O'Malley: So I think we're comfortable with the debt level where it is. I mean, obviously reducing the debt where we have in addition to generating the cash and seeing what the company can do in terms of cash generation certainly gives us a lot more confidence than how we were 10 months ago. However, I think as we've stated before, longer term we can see the debt level more in the $1.6-$1.7 billion range is probably the right amount of leverage for the company given the lessons of the last 18-24 months. And we'd probably just continue to go ahead and deal with that through cash generation from operations. David Bailey – Goldman Sachs: Okay. Thank you.

Thank you. Our next question will be from the line of Mark Moskowitz from JP Morgan. Please proceed. Mark Moskowitz – JP Morgan: Thank you, good afternoon. A couple of questions here first. It seems like the hard disk drive industry is really benefiting from some structural dynamics, it's really propping up ASPs. How sustainable do you see some of these dynamics in terms of at what point is the major Tier 1 OEM customer saying enough is enough, you guys can't keep on raising prices on us going into the back half of the year? Stephen J. Luczo: Well, I guess I'm not sure that I could validate the raising prices comment. I don't think we've raised prices. I think supply and demand have been relatively in balance, and I think the industry obviously from a revenue perspective took a pretty big hit in the December quarter and I think the industry basically pulled back on capital pretty dramatically to make supply and demand come into the balance. You got to remember, we were probably off by 25 million units on a TAM of 125 million units in the December quarter so that was a lot of excess inventory that was basically priced to sell and that impacted pricing for a number of quarters. So I think for most of our customer base at this point, they're more concerned about availability of supply and obviously we always have to be competitive in terms of the value that we attach to the product that we're selling and most of our customers can be pretty pleased at this point, I think, to get the products they're getting and getting them when they need them. Mark Moskowitz – JP Morgan: The second question then revolves around the Mission-Critical weakness that you're seeing in terms of the enterprise hard disk drives. Are you seeing these weaknesses with the enterprise more a reflection of customers deferring large ticket items, or is there any sort of secular shift whereby SATA drives are starting to win greater placements in systems historically served by fiber channel? Stephen J. Luczo: I wouldn't characterize it as a weakness. As a matter of fact I pointed to the quarter over quarter growth before, but I would say, Mark, that the right way to look at it is what was the original baseline? We talked about this for the last couple of quarters which was the refresh rate of either IT systems or enterprise systems hit a baseline when the economy went down and it slowly climbed back out of that and hasn't gotten all the way back to the previous levels. We actually do anticipate some growth like we said. It'll be up sequentially this time and there is some pent up demand, we believe. So forecasting that going out is rather difficult, but I don't think it's a replacement rate with SATA versus SAS or fiber channel right now. Mark Moskowitz – JP Morgan: Okay. Thank you.

Thank you. Our next question will be from the line of Jayson Noland at Robert W. Baird. Please proceed. Jayson Noland - Robert W. Baird: Thank you. A question on OpEx first. Is 300 still within reach or with increases in variable comp is that not possible anymore? Patrick J. O'Malley: I wouldn't say it's not possible. Obviously I think we have some things to do on that, Jayson, and we continue to look at those. Like I said, our return of profitability sort of accelerates some growth in there that we'd look to long term offset a vast majority of that. I don't have a timeline to give you, but we'll certainly update you on that as we progress. But I think the way to even look at it, Jayson, which sort of ties that 300 as the business gets the $3 billion again, we'd like to run our OpEx somewhere in the 10%-12% range. Stephen J. Luczo: Yeah. I think the shift is coming in a year ago when we sat a $300 million number is when we were thinking about sub $2 billion revenue numbers. And again, how do we have a business model that is setup to be running below $2 billion in revenues, how do we still maintain cash flow and profitability? And we restructured the company pretty aggressively to get to that point and in doing so we kind of targeted a sub $300 million per quarter OpEx number. I think two calls ago we indicated that in a more stable environment, obviously you want to be investing in underlying technologies, particularly in storage. I mean there's so many shifts occurring in terms of the deployment of storage across so many application sets, whether or not it's cloud based or mobility or Windows 7 or netbooks, notebooks — the way we really think of it is how do we get to an operating expense model of 10%-12%, an operating contribution model anywhere from 10%-14% or higher depending on gross margins. So I think the net net is if you looked at the model three or four years ago versus now, what we're trying to do is produce one that has an operating contribution that is probably a couple of points higher than where we used to operate as a long-term model. So still obviously active management on OpEx, but we want to obviously make sure we're investing for some of these future opportunities that we think are pretty significant. Jayson Noland - Robert W. Baird: That makes sense. On the CapEx side I believe you said this was under review and I may have missed it, but I would assume there would be upward pressure to the 450 million in fiscal '10? Stephen J. Luczo: Yeah. I think especially, as was indicated in the first question, if December pulls through solidly for the entire three months, which we have no reason not to believe at this point, but again, based on last year's history you need to remain cautious. And your normal seasonal pattern would say March quarter anywhere from down slightly to up slightly and then June of course falling off and then September and December stronger. I think what's tricky this year of course is this could be against the backdrop of a general gradual growth in a macroeconomic trend which means maybe we're growing through the fiscal year and then through the calendar year which obviously would imply pressure on capital as you indicate throughout the year and then the question is how do we deploy that as reasonable as possible in terms of matching capacities so we're optimizing our profitability, but still fulfilling our customer needs? Jayson Noland - Robert W. Baird: Thanks, Steve.

Thanks you. Our next question will be from the line of Ananda Baruah from Brean, Murray. Please proceed. Ananda Baruah - Brean, Murray, Carret & Co.: Hi. Thanks, guys. Just a clarification around the new guidance. Is it 190 before the charges and then $0.35 of charge so then 225 after charges? Patrick J. O'Malley: It's actually 190 and 30, but yes. I mean those would be the numbers we've quoted. Ananda Baruah - Brean, Murray, Carret & Co.: Got it. Okay, thank you very much. So, 220 overall. And then I guess just on the OpEx, another question about the OpEx, is the 335, is that sort of a new base level relative to where your revenues are? And the way to think of it going forward, I know you're giving your 10%-12% guidance ranges, but is there a way to think about it going forward as it'll tend to trend more or less with revenue growth? Patrick J. O'Malley: We think we still have some leverage to take some of that out, but as Steve mentioned, we certainly have a lot of options on other areas to deploy OpEx dollars, especially in the R&D that we continue to look at. And as Steve said, we're really focused on an operating margin to deliver 10%-14%. So we'll make those tradeoffs in between margin and OpEx, but clearly if the 335 is probably fair to model for the short term — but we certainly will look to optimize whether taking some out, but reinvesting some of those dollars. Ananda Baruah - Brean, Murray, Carret & Co.: Okay, great thanks. And then if I could just touch base on the CapEx issue. Without giving any guidance, just talking about to what degree you might think of adding, if you were theoretically to decide in January to begin to put on capacity, when might we expect the usual volume capacity to really be in place? Patrick J. O'Malley: Probably back half of the year. Stephen J. Luczo: It depends on what we're putting in place. That's the key and I think that's why this is much more complicated because it's not just even Seagate — we have to work with our supply chain as well. Patrick J. O'Malley: The supply chain is a lot narrower and we want to respect the confidentiality with our supply chain as well. Ananda Baruah - Brean, Murray, Carret & Co.: Certainly. And so is there any way to give us a big picture view, sort of all things equal, what pricing might look like next year I mean terms of — I mean, if we think about typical year over year ASP declines, sort of mid single digits, but you have some mixup going on within sort of your notebook PC mix today, and the if we get sort of some kind of tailwind or however you want to call it, a little bit of support in the PC demand next year and then a pickup in enterprise demand — I mean, would those mid-single digits typical type of ASP declines be on the conservative side? Patrick J. O'Malley: Yeah. Again, I think you pointed out the reason why we really can't comment on it. I mean, there are so many variables between what happens if there's a big refresh cycle after 7, what happens if there's a pickup in enterprise Mission-Critical, what happens if supply and demand are constrained, and what the competitive situation is in terms of their ability to ramp products, to introduce new products, and to ramp yield. I think it's definitely a different environment I guess is what we can say the last nine or 10 months and I think we're highly focused on just addressing what our customers need and helping them achieve their revenue plans right now. Ananda Baruah - Brean, Murray, Carret & Co.: Okay, great. And then just last one for me if I could? I guess on the supply side of things in areas where you're considering glass and anything else, what are you seeing from a pricing perspective from those guys? Is the input cost starting to go up, and what are they looking for from maybe the industry collectively before they're willing to take on and on more capacity. Stephen J. Luczo: Yeah. Again, I think our supply relationships run pretty long and pretty deep and we feel pretty good about where we're positioned in terms of our supply base and that means with respect to quality, quantity, availability, and price. I think to comment anything beyond that again would kind of betray the trust that you have with our suppliers and you need to ask them directly. Ananda Baruah - Brean, Murray, Carret & Co.: Okay. Thanks.

Thank you. Our next question will be from the line of Scott Craig from Bank of America-Merrill Lynch, please proceed. Scott Craig - Bank of America-Merrill Lynch: Okay. Thanks, good afternoon. Any flavor you can provide around the fiscal 2010 gross margin assumptions in your EPS? And then secondly, around the gross margin, the 22%-26% range, it sounds like you’re going to be there at the high end already without an enterprise rebound. So, what’s the likelihood that you think you can get above that 26% range if the enterprise business was to come back and in at least somewhat of a meaningful way? Thanks.

Well, obviously it’s not an absolute. There’s going to be times when you can be above it. But I mean, for planning purposes to run our business we think longer term we should be in that 22%-26%. So we have spot points below or above it, something anomaly that you might have a strong quarter, because of an enterprise free fresh. But that’s not how we’re going to plan our business. So, always an opportunity, but certainly not planning for that. And looking at the year, obviously, going from 22%-26% you can certainly lean towards the higher end of that if you’re coming up with the numbers that we’ve talked about. And I think you can model that pretty quickly, actually, with the $1.90 we lay in there. W. Whitmore: Well, obviously it’s not an absolute. There’s going to be times when you can be above it. But I mean, for planning purposes to run our business we think longer term we should be in that 22%-26%. So we have spot points below or above it, something anomaly that you might have a strong quarter, because of an enterprise free fresh. But that’s not how we’re going to plan our business. So, always an opportunity, but certainly not planning for that. And looking at the year, obviously, going from 22%-26% you can certainly lean towards the higher end of that if you’re coming up with the numbers that we’ve talked about. And I think you can model that pretty quickly, actually, with the $1.90 we lay in there. Scott Craig - Bank of America-Merrill Lynch: Okay. Thank you.

Thank you. Our next question will be from the line of Aaron Sharma from UBS, please proceed. Aaron Sharma - UBS: I was just wondering if you could provide some color on the strength in the consumer market during the quarter? It seemed like there was a nice bounce-back, I just wanted to get some details on where you're sitting in the market and how sustainable this is in 2010? And also how we should look at your business going forward when factoring both share gains as well as overall market growth rates for the different segments? I just have a quick follow up after that. Thanks. Patrick J. O'Malley: Yeah, I think Aaron, the CE markets have held in there. They’re not back to the same levels that they were at one year back. But to your point, I think the DVR and gaming markets — our perception of them, we don’t participate as fully as we might at once done in the gaming markets. But I think in the DVR and the gaming markets both the volume is – you could pretty much figure out from the delta between our TAM guidance and the desktop notebook and enterprise and then the overall TAM guidance what the delta is. And there’s some portable — some 1.8 inch markets that are still represented. And I think there not zero. They’re not at the historical levels that they were a year ago. But they’re maybe been, I’ll say, 70%-80% of what they were before. Aaron Sharma - UBS: Gotcha, and just in terms of mix, I’d say over the next 12-18 months, I mean, should we just expect that to grow with kind the market or should we – just when in terms of factoring in share games and potential for that? Patrick J. O'Malley: No. I think it’s going to grow roughly with the markets. Aaron Sharma - UBS: Okay. And then really quickly, just in terms of linearity, how would you describe it for the September quarter versus prior quarters. And thus far into October, I know it’s tough, but any idea how December may play out in terms of linearity versus prior years? Patrick J. O'Malley: Yeah. The September quarter was one of our better quarters from a linearity perspective. It goes back to the comments that Steve made earlier. You know, I think that’s indicative of supply and demand being in balance and how the customer base are reacting — the entire supply chain, inbound and outbound, are reacting in light of the macroeconomics. So, September was a very good quarter. I won’t comment on this quarter. Aaron Sharma - UBS: Okay. Thank you.

Thank you. And our next question will from the line of Kevin Hunt, please proceed. Kevin Hunt - Unidentified Company: Yeah. I just want to follow up on that consumer question. Your performance in consumer was actually the strongest sequentially of any year unit's performance. And is there any dynamics you can assess there why you may have been doing better than others out there? Stephen J. Luczo: Well, I think the DVR market, like we said, where we have a lot of well established customer relationships, has performed like I said stronger in most inside of this economic recovery. The gaming market, to your point, I don’t know why you’d say relatively speaking we’re better than everyone else because we haven’t participated as much as we did historically in that market. Kevin Hunt - Unidentified Company: And one follow-up on this Windows 7 cycle. I mean, how much have you seen in terms of availability of forecast from the PC OEMS in terms of what they’re expecting for this launch for this quarter? And it sounds like you’re assuming, really, not much in for 2010 at this point. Stephen J. Luczo: Yeah. I mean, again, I don’t want to speak for our customers because it’s easy enough for you guys just to get it straight from their mouths. But I think what we have said as P&R modeling that we provided for you, we don’t have built into their big refresh cycle being driven by Windows 7. And on the other side of that, I would say that the anecdotal evidence that we’re getting, which of course for us would be second hand, maybe first hand if it’s from distributors that are starting to address the Windows 7 market. We’re certainly getting more indication that Windows 7 will be a more positive impact to the PC refresh cycle than maybe has been previously predicted. Kevin Hunt - Unidentified Company: Okay. Thank you.

Thank you. Our next question will be from the line of Aaron Rakers, please proceed Aaron Rakers – Stifel Nicolaus: Yes. Thanks, guys. I got a couple questions. I guess the first one I think about the model, the 520 million of fully diluted shares. Can you give us some color? I have people start to think of the 220 earnings number what the – how we should think about the fully diluted share count here as we – I would anticipate the stock to potentially see a favorable reaction here. Just any help on that, kind of, relative to the share price would be helpful. Patrick J. O'Malley: Well, right now, we’re just using the 520, I mean, we don’t want to really get into predicting what the share price would do. But, obviously, we do have options out there that are above the price we’re at today. So they will go into the calculation for that. But I think we’ve taken the largest portion of that dilution through this rebound. But there’d still be some level of dilution with those options that are underwater today that were – if the stock were to continue to accrue. But I would use the 520 because that’s how we’re using for modeling purposes. Stephen J. Luczo: Take one more question, I think.

Sure, our next question will be from the line of Keith Bachman from the Bank of Montreal, please proceed. Keith Bachman - BMO Capital Markets: Yeah. Thanks, guys. Just one quickie for you, Steve. Could you just do a little color on how you think the industry ended inventory levels for September quarter? I think we all think it’s low, but characterization. But more importantly, you talked about getting the three month quarter. If we do get a three month quarter how does that play down in terms of ending December level inventories? Stephen J. Luczo: I think the industry ended inventory levels low, maybe even very low. I think the customers’ inventory levels are low, maybe even very low. I think if the December quarter plays out as a solid booking through December we’ll be exiting the year with very low inventories. Keith Bachman - BMO Capital Markets: And Steve, just take that one step farther, therefore, the normal seasonal patterns for the March quarter would be an inappropriate conclusion if you follow that line of reason, correct? Stephen J. Luczo: I mean, it could be again, yeah. March quarter’s always – that’s what we’re trying to say. I mean, the March quarter is an interesting quarter if you look at it over the last 15 or 20 years. It can be slightly down, slightly up, flat. But I think your point is if this is against exiting within inventories and strong demand through December against a general economic environment that's improving, then yes, we could see the March TAM be up from December. And then you have the issues with respect to capacity that we think would be pretty significant in terms of the industry continuing to chase that. Keith Bachman - BMO Capital Markets: Okay. Thanks, guys. Stephen J. Luczo: Okay. I just want to thank everyone for calling us today. And obviously thank all our shareholders for their support as well and we look forward to speaking with you again next quarter. Thank you.

And thank you ladies and gentlemen, this concludes today’s presentation. You may not disconnect. Thank you for joining.