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•	expectations regarding our Flash Ventures joint venture with Toshiba Memory Corporation and regarding our flash output and the flash industry;

•	our quarterly cash dividend policy and share repurchase program;

•	expectations regarding our product development and technology plans;

•	expectations regarding our future results of operations;

•	expectations regarding the outcome of legal proceedings in which we are involved;

•	expectations regarding the impact of the Tax Cuts and Jobs Act enacted on December 22, 2017 on the Company;

•	expectations regarding the repatriation of funds from our foreign operations;

•	our beliefs regarding tax benefits and the timing of future payments, if any, relating to the unrecognized tax benefits, and the adequacy of our tax provisions;

•	expectations regarding capital investments and sources of funding for those investments; and

•	our beliefs regarding the sufficiency of our available liquidity to meet our working capital, debt, dividend and capital expenditure needs.

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Item 1.	Financial Statements (unaudited)

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Note 1.	Organization and Basis of Presentation

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Note 2.	Recent Accounting Pronouncements

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Note 3.	Revenues

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(1)	Prior year information is presented in accordance with the accounting guidance in effect during that period and has not been updated for Topic 606. The impact of the adoption of Topic 606 was not material.

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Note 4.	Supplemental Financial Statement Data

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Note 5.	Fair Value Measurements and Investments

Level 1.	Quoted prices in active markets for identical assets or liabilities.

Level 2.	Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3.	Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities.

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Note 6.	Derivative Instruments and Hedging Activities

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Note 7.	Debt

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Note 8.	Pension and Other Post-Retirement Benefit Plans

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Note 9.	Commitments, Contingencies and Related Parties

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Note 10.	Shareholders’ Equity

(1)	Weighted average service period assumes the performance metrics are met for the PSUs.

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Note 11.	Income Tax Expense

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Note 12.	Net Income Per Common Share

(1)	For purposes of computing diluted income per common share, certain potentially dilutive securities have been excluded from the calculation because their effect would have been anti-dilutive.

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Note 13.	Employee Termination, Asset Impairment and Other Charges

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Note 14.	Legal Proceedings

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Note 15.	Separate Financial Information of Guarantor Subsidiaries

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Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

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(1)	Percentages may not total due to rounding.

(1)	Prior year information is presented in accordance with the accounting guidance in effect during that period and has not been updated for Topic 606.

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(1)	Principal portion of debt, excluding discounts and issuance costs.

(2)	Includes reimbursement for depreciation and lease payments on owned and committed equipment, funding commitments for loans and equity investments and reimbursement for other committed expenses, including R&D. Funding commitments assume no additional operating lease guarantees. Additional operating lease guarantees can reduce funding commitments.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk

(1)	Expressed in units of foreign currency per U.S. dollar.

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Item 4.	Controls and Procedures

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Item 1.	Legal Proceedings

Item 1A.	Risk Factors

•	Our direct and indirect customers may delay or reduce their purchases of our products and systems containing our products.

•	If demand for our products slows as a result of a deterioration in economic conditions, we may undertake restructuring activities to realign our cost structure with softening demand.

•	We extend credit and payment terms to some of our customers and we could suffer significant losses if a customer whose accounts receivable we have not insured, or have underinsured, fails to pay us on their accounts receivable balances.

•	If negative or uncertain global economic conditions result in circumstances, such as a sustained decline in our stock price and market capitalization or a decrease in our forecasted cash flows, indicating that the carrying value of our long-lived assets or goodwill may be impaired, we could be required to record a significant charge to earnings in our Consolidated Financial Statements.

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•	difficulties faced in manufacturing ramp;

•	implementing at an acceptable cost product features expected by our customers;

•	our ability to successfully transition future core, processor and controller development to the RISC-V architecture;

•	market acceptance/qualification;

•	effective management of inventory levels in line with anticipated product demand;

•	our ability to respond to customer requests for new products and software associated with our products;

•	our ability to incorporate open source software elements into our products and operate in an open source environment;

•	quality problems or other defects in the early stages of new product introduction and problems with compatibility between our products and those of our customers that were not anticipated in the design of those products;

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•	our ability to increase our software development capability; and

•	the effectiveness of our go-to-market capability in selling new products.

•	our interests could diverge from our partners’ interests or we may not agree with co-venturers on ongoing activities, technology transitions or on the amount, timing or nature of further investments in the relationship;

•	we may experience difficulties and delays in product and technology development at, ramping production at, and transferring technology to, our business ventures;

•	our control over the operations of our business ventures is limited;

•	due to financial constraints, our co-venturers may be unable to meet their commitments to us or may pose credit risks for our transactions with them;

•	due to differing business models, financial constraints or long-term business goals, our partners may decide not to join us in funding capital investment by our business ventures, which may result in higher levels of cash expenditures by us or prevent us from proceeding in the investment;

•	we may lose the rights to technology or products being developed by the strategic relationship, including if any of our co-venturers is acquired by another company or otherwise transfers its interest in the business venture, files for bankruptcy or experiences financial or other losses;

•	a bankruptcy event involving a co-venturer could result in the early termination or adverse modification of the business venture or agreements governing the business venture;

•	we may experience difficulties or delays in collecting amounts due to us from our co-venturers;

•	the terms of our arrangements may turn out to be unfavorable; and

•	changes in tax, legal or regulatory requirements may necessitate changes in the agreements with our co-venturers.

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•	obtaining requisite governmental permits and approvals, compliance with foreign laws and regulations, changes in foreign laws and regulations;

•	the need to comply with regulations on international business, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, the anti-bribery laws of other countries and rules regarding conflict minerals;

•	currency exchange rate fluctuations or restrictions;

•	political and economic instability, civil unrest and natural disasters;

•	limited transportation availability, delays, and extended time required for shipping, which risks may be compounded in periods of price declines;

•	higher freight rates;

•	labor challenges, including difficulties finding and retaining talent or responding to labor disputes or disruptions;

•	trade restrictions, such as export bans, embargos, sanctions and license and certification requirements (including on encryption technology), new or increased tariffs and fees and complex customs regulations;

•	copyright levies or similar fees or taxes imposed in European and other countries;

•	exchange, currency and tax controls and reallocations;

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•	increasing labor and overhead costs;

•	weaker protection of IP rights;

•	difficulties in managing international operations, including appropriate internal controls; and

•	loss or non-renewal of favorable tax treatment under agreements or treaties with foreign tax authorities.

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•	inconsistent demand from customers whose sales are correlated to large projects and expansions which can be sporadic;

•	internal customer development of storage solutions;

•	developments in the regulation and enforcement of digital rights management;

•	emergence of new technologies;

•	volatility in demand due to differing patterns of technology adoption and innovation; or

•	concerns about data protection by end users.

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•	limiting our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or other general corporate purposes;

•	requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions, R&D and other general corporate purposes;

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imposing financial and other restrictive covenants on our operations, including limiting our ability to (i) declare or pay dividends or repurchase shares of our common stock; (ii) purchase assets, make investments, complete acquisitions, consolidate or merge with or into, or sell all or substantially all of our assets to, another person; (iii) dispose of assets; (iv) incur liens; and (v) enter into transactions with affiliates;

•	placing us at a competitive disadvantage to competitors carrying less debt; and

•	making us more vulnerable to economic downturns and limiting our ability to withstand competitive pressures or take advantage of new opportunities to grow our business.

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•	weakness in demand for one or more product categories;

•	the timing of orders from and shipment of products to major customers, loss of major customers;

•	our product mix;

•	reductions in the ASPs of our products and lower margins;

•	excess output, capacity or inventory, resulting in lower ASPs, financial charges or impairments, or insufficient output, capacity or inventory, resulting in lost revenue opportunities;

•	inability to successfully transition to 3D NAND or other technology developments, or other failure to reduce product costs to keep pace with reduction in ASPs;

•	manufacturing delays or interruptions;

•	delays in design wins or customer qualifications, acceptance by customers of competing products in lieu of our products;

•	success of our partnerships and joint ventures, in particular the volume, timing and cost of wafer production at Flash Ventures, and our success in managing the relationships with our strategic partners;

•	inability to realize the potential benefits of our acquisitions and the success of our integration efforts;

•	ability to penetrate new markets for our storage solutions;

•	variations in the cost of and lead times for components for our products, disruptions of our supply chain;

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•	limited availability of components that we obtain from a single or a limited number of suppliers;

•	seasonal and other fluctuations in demand often due to technological advances;

•	increase in costs due to warranty claims;

•	higher costs as a result of currency exchange rate fluctuations; and

•	availability and rates of transportation.

•	price protection adjustments and other sales promotions and allowances on products sold to retailers, resellers and distributors;

•	inventory adjustments for write-down of inventories to lower of cost or market value (net realizable value);

•	testing of goodwill and other long-lived assets for impairment;

•	accruals for product returns;

•	accruals for litigation and other contingencies

•	liabilities for unrecognized tax benefits; and

•	provisional estimates related to tax reform.

•	actual or anticipated fluctuations in our operating results, including those resulting from the seasonality of our business;

•	perceptions about our strategic relationships and joint ventures, access to supply of flash-based memory, new technologies and technology transitions;

•	announcements of technological innovations by us or our competitors, which may decrease the volume and profitability of sales of our existing products and increase the risk of inventory obsolescence;

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•	new products introduced by us or our competitors;

•	strategic actions by us or competitors, such as acquisitions and restructurings;

•	periods of severe pricing pressures due to oversupply or price erosion resulting from competitive pressures or industry consolidation;

•	developments with respect to patents or proprietary rights, and any litigation;

•	proposed or adopted regulatory changes or developments or anticipated or pending investigations, proceedings or litigation that involve or affect us or our competitors;

•	conditions and trends in the hard drive, solid-state storage, flash memory, computer, mobile, data and content management, storage and communication industries;

•	contraction in our operating results or growth rates that are lower than our previous high growth-rate periods;

•	failure to meet analysts’ revenue or earnings estimates or changes in financial estimates or publication of research reports and recommendations by financial analysts relating specifically to us or the storage industry in general;

•	announcements relating to dividends and share repurchases; and

•	macroeconomic conditions that affect the market generally and, in particular, developments related to market conditions for our industry.

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Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

(1)	Includes commissions.

(2)

Our Board of Directors previously authorized $5.00 billion for the repurchase of our common stock. Between June 30, 2018 and July 25, 2018, we repurchased 0.8 million shares for a total cost of $61 million under this previous authorization. On July 25, 2018, our Board of Directors authorized a new $5.00 billion share repurchase program that is effective through July 25, 2023, replacing all prior programs. During the three months ended September 28, 2018, we purchased 7.6 million shares for a total cost of $502 million under this new program. Therefore, the Company’s stock repurchases under all stock repurchase authorizations in effect for the three months ended September 28, 2018 totaled $563 million. Repurchases under the stock repurchase program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan. We expect stock repurchases to be funded principally by operating cash flows.

Item 3.	Defaults Upon Senior Securities

Item 4.	Mine Safety Disclosures

Item 5.	Other Information

Item 6.	Exhibits

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†	Filed with this report.

**	Furnished with this report.

±	Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplemental copies of any of the omitted schedules upon request by the Securities and Exchange Commission.

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