Symantec: Symantec Delivers Solid Fiscal Third Quarter Operating Results

CUPERTINO, CA--(Marketwire - January 28, 2009) - Symantec Corp. (NASDAQ: [ SYMC ]) today reported the results of its third quarter of fiscal year 2009, ended Jan. 2, 2009. GAAP revenue for the quarter was $1.51 billion and non-GAAP revenue was $1.54 billion. Symantec delivered stronger than expected results on all of its key financial metrics in the fiscal third quarter.

Quarterly Results

GAAP Results: GAAP net loss for the third quarter was $6.81 billion compared with net income of $132 million for the same quarter last year. GAAP diluted loss per share was $8.23 compared with diluted earnings per share of $0.15 for the same quarter last year.

The GAAP net loss for the third quarter of fiscal year 2009 includes a non-cash goodwill impairment charge of approximately $7 billion. Based on a combination of factors, including the current economic environment and a decline in our market capitalization, we concluded that there were sufficient indicators to require us to perform an interim goodwill impairment analysis. We have not completed the goodwill impairment analysis and expect to finalize it during the fourth quarter of fiscal year 2009. We may make an adjustment to this charge when the goodwill impairment analysis is completed.

GAAP deferred revenue at the end of the quarter was $2.92 billion compared with $2.88 billion for the same quarter last year. Cash flow from operating activities for the third quarter was $402 million compared with $462 million for the same quarter last year.

Non-GAAP Results: Non-GAAP net income for the third quarter of fiscal year 2009 was $350 million, up 20 percent compared with $292 million for the same quarter last year. Non-GAAP diluted earnings per share were $0.42, up 27 percent compared with earnings per share of $0.33 for the year ago quarter.

Non-GAAP deferred revenue was $2.96 billion, up 2 percent compared with $2.90 billion at the end of the third quarter of fiscal year 2008.

For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached condensed consolidated financial statements.

During the third quarter of fiscal year 2009, we repurchased 16.1 million shares, equivalent to $200 million. There is $400 million remaining in the current board authorized stock repurchase plan.

"Effective sales execution and our team's ability to successfully highlight the near-term ROI benefits of our solutions enabled us to deliver stronger than expected revenue against the backdrop of a challenging global economy," said Enrique Salem, chief operating officer, Symantec. "The combination of top-line revenue growth, ongoing share repurchases and tight expense management has enabled us to achieve our seventh consecutive quarter of double-digit non-GAAP earnings growth. We are well-positioned to continue our success and emerge from this economic downturn as a stronger company."

Business Segment and Geographic Highlights

For the quarter, Symantec's Storage and Server Management segment represented 37 percent of total non-GAAP revenue and grew 1 percent year-over-year. The Consumer business represented 29 percent of total non-GAAP revenue and grew 2 percent year-over-year. The Security and Compliance segment represented 26 percent of total non-GAAP revenue and declined 5 percent year-over-year. Services represented 8 percent of total non-GAAP revenue and grew 20 percent year-over-year.

International revenue represented 50 percent of total non-GAAP revenue in the third quarter of fiscal year 2009 and declined 5 percent year-over-year. The Europe, Middle East and Africa region represented 31 percent of total non-GAAP revenue for the quarter and declined 9 percent year-over-year. The Asia Pacific/Japan revenue for the quarter represented 14 percent of total non-GAAP revenue and grew 1 percent year-over-year. The Americas, including the United States, Latin America and Canada, represented 55 percent of total non-GAAP revenue and increased 7 percent year-over-year.

Currency Impact

Foreign currency movements negatively impacted non-GAAP revenue by approximately 4 percentage points year-over-year and non-GAAP deferred revenue by approximately 2 percentage points year-over-year. Foreign currency movements negatively impacted EMEA non-GAAP revenue by approximately 10 percentage points and APJ non-GAAP revenue by approximately 2 percentage points year-over-year.

Quarterly Highlights

Symantec signed 448 agreements worldwide with a contract value of more than $300,000 each. Of the 448 agreements, 104 had a value of more than $1 million. In the third quarter of fiscal year 2009, 84 percent of these large transactions included multiple products.

Symantec signed new or extended agreements with customers including Continental Airlines, the fourth-largest U.S.-based airline serving more than 300 destinations globally; Yamaha Corporation of America, which offers a full line of musical instruments and audio/visual products to the U.S. and Canadian markets; Japan Tobacco, a leading global tobacco company; IXE Banco, providing financial services in Mexico with a focus on corporate and business banking and high net worth individual investors; Telefonica Moviles Argentina S.A., the leading mobile telecommunications provider in Argentina with more than 15 million customers; Canadian Tire Corporation, retailer of automobile supplies and service, fuel, apparel, and financial services throughout Canada; and SK Telecom, the leader in Korea's information communication industry.

Fourth Quarter Fiscal Year 2009 Guidance

Guidance assumes an exchange rate of $1.32 per Euro for the March 2009 quarter versus the actual weighted average rate of $1.50 per Euro and the end of period rate of $1.58 per Euro for the March 2008 quarter.

For the fourth quarter of fiscal year 2009, ending April 3, 2009, GAAP revenue is estimated between $1.475 billion and $1.525 billion. GAAP diluted earnings per share are estimated between $0.12 and $0.14. GAAP deferred revenue is expected to be in the range of $2.972 billion and $3.072 billion.

Non-GAAP revenue for the quarter is estimated between $1.49 billion and $1.54 billion. Non-GAAP diluted earnings per share are estimated between $0.33 and $0.35. Non-GAAP deferred revenue is expected to be in the range of $3.0 billion and $3.1 billion.

Conference Call

Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the third quarter of fiscal year 2009, ended Jan. 2, 2009, and to review guidance. Interested parties may access the conference call on the Internet at [ http://www.symantec.com/invest ]. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. A replay and script of our officers' remarks will be available on the investor relations' home page shortly after the call is completed.

About Symantec

Symantec is a global leader in providing security, storage and systems management solutions to help consumers and organizations secure and manage their information-driven world. Our software and services protect against more risks at more points, more completely and efficiently, enabling confidence wherever information is used or stored. More information is available at [ www.symantec.com ].

NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room at [ http://www.symantec.com/news ]. All prices noted are in U.S. dollars and are valid only in the United States.

Symantec and the Symantec Logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.

FORWARD-LOOKING STATEMENTS: This press release contains statements regarding our financial and business results, which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements relating to estimated charges with respect to the impairment of goodwill, projections of future revenue, earnings per share and deferred revenue, as well as projections of amortization of acquisition-related intangibles and stock-based compensation and restructuring charges. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: general economic conditions; maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factor section of our Form 10-K for the year ended March 28, 2008.

USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to a series of acquisitions, the impact of SFAS 123(R), impairment charges and other corporate events. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information, on the investor relations' page of our Web site at [ www.symantec.com/invest ].

 SYMANTEC CORPORATION Condensed Consolidated Balance Sheets (In thousands) January 2, March 28, 2009 2008 ------------ ------------- (Unaudited) * ASSETS Current assets: Cash and cash equivalents $ 1,449,033 $ 1,890,225 Short-term investments 79,888 536,728 Trade accounts receivable, net 927,048 758,200 Inventories 27,419 34,138 Deferred income taxes 181,003 193,775 Other current assets 278,737 316,852 ------------ ------------- Total current assets 2,943,128 3,729,918 Property and equipment, net 972,240 1,001,750 Acquired product rights, net 510,474 648,950 Other intangible assets, net 1,278,665 1,243,524 Goodwill 4,955,678 11,207,357 Investment in joint venture 116,602 150,000 Long-term deferred income taxes 4,399 55,304 Other long-term assets 60,884 55,291 ------------ ------------- Total assets $ 10,842,070 $ 18,092,094 ============ ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 213,474 $ 169,631 Accrued compensation and benefits 387,535 431,345 Current deferred revenue 2,512,319 2,661,515 Income taxes payable 92,616 72,263 Short-term borrowing - 200,000 Other current liabilities 264,897 264,832 ------------ ------------- Total current liabilities 3,470,841 3,799,586 Convertible senior notes 2,100,000 2,100,000 Long-term deferred revenue 406,293 415,054 Long-term deferred tax liabilities 73,801 219,341 Long-term income taxes payable 510,969 478,743 Other long-term liabilities 89,473 106,187 ------------ ------------- Total liabilities 6,651,377 7,118,911 Stockholders' equity: Common stock 8,202 8,393 Additional paid-in capital 8,955,257 9,139,084 Accumulated other comprehensive income 154,023 159,792 Accumulated (deficit) earnings (4,926,789) 1,665,914 ------------ ------------- Total stockholders' equity 4,190,693 10,973,183 ------------ ------------- Total liabilities and stockholders' equity $ 10,842,070 $ 18,092,094 ============ ============= ____________________ * Derived from audited financials SYMANTEC CORPORATION Condensed Consolidated Statements of Operations (In thousands, except per share data) Three Months Ended Nine Months Ended January 2, December 28, January 2, December 28, 2009 2007 2009 2007 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) Net revenues: Content, subscriptions, and maintenance $ 1,196,938 $ 1,167,443 $ 3,668,645 $ 3,371,126 Licenses 317,016 347,808 1,013,641 963,552 ------------ ------------ ------------ ------------ Total net revenues 1,513,954 1,515,251 4,682,286 4,334,678 Cost of revenues: Content, subscriptions, and maintenance 200,338 204,355 630,982 619,593 Licenses 8,289 10,304 27,134 31,434 Amortization of acquired product rights 90,209 84,502 261,772 262,924 ------------ ------------ ------------ ------------ Total cost of revenues 298,836 299,161 919,888 913,951 ------------ ------------ ------------ ------------ Gross profit 1,215,118 1,216,090 3,762,398 3,420,727 Operating expenses: Sales and marketing 580,708 627,980 1,840,510 1,791,672 Research and development 204,701 225,293 655,185 671,928 General and administrative 83,508 82,600 261,112 254,850 Amortization of Other purchased Intangible assets 60,647 54,996 171,677 168,847 Restructuring 45,805 23,305 72,600 51,883 Impairment of goodwill 7,005,702 - 7,005,702 - Impairment of assets held for sale 16,849 6,142 43,053 92,688 Patent settlement (9,900) - (9,900) - ------------ ------------ ------------ ------------ Total operating expenses 7,988,020 1,020,316 10,039,939 3,031,868 ------------ ------------ ------------ ------------ Operating (loss) income (6,772,902) 195,774 (6,277,541) 388,859 Interest income 4,676 19,997 34,966 59,997 Interest expense (6,511) (7,477) (22,792) (20,385) Other income (expense), net 16,571 (2,348) 7,728 883 ------------ ------------ ------------ ------------ (Loss) income before income taxes and loss from joint venture (6,758,166) 205,946 (6,257,639) 429,354 Provision for income taxes 31,620 74,056 188,455 151,890 Loss from joint venture 16,471 - 33,398 - ------------ ------------ ------------ ------------ Net (loss) income $ (6,806,257) $ 131,890 $ (6,479,492) $ 277,464 ============ ============ ============ ============ Net (loss) income per share -- basic $ (8.23) $ 0.15 $ (7.76) $ 0.32 Net (loss) income per share -- diluted $ (8.23) $ 0.15 $ (7.76) $ 0.31 Weighted-average shares outstanding -- basic 826,959 859,997 834,774 875,971 Weighted-average shares outstanding -- diluted 826,959 876,221 834,774 893,794 SYMANTEC CORPORATION Condensed Consolidated Statement of Cash Flows (In thousands) Nine Months Ended January 2, December 28, 2009 2007 ------------ ------------ (Unaudited) OPERATING ACTIVITIES: Net (loss) income $ (6,479,492) $ 277,464 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 626,402 618,404 Stock-based compensation expense 123,130 121,151 Impairment of assets held for sale 42,719 93,888 Deferred income taxes (53,267) (178,647) Income tax benefit from the exercise of stock options 17,088 27,730 Excess income tax benefit from the exercise of stock options (16,197) (18,307) Loss from joint venture 33,398 - Realized and other than temporary impairment loss on investments 2,410 - Impairment of goodwill 7,005,702 - Other 14,263 3,253 Net change in assets and liabilities, excluding effects of acquisitions: Trade accounts receivable, net (157,069) (165,392) Inventories 5,835 9,224 Accounts payable (20,279) (13,249) Accrued compensation and benefits (44,638) 83,794 Deferred revenue (49,006) 9,466 Income taxes payable (17,569) 215,462 Other assets 67,752 58,856 Other liabilities (37,641) 1,186 ------------ ------------ Net cash provided by operating activities 1,063,541 1,144,283 INVESTING ACTIVITIES: Purchase of property and equipment (215,232) (209,129) Proceeds from sales of property and equipment 39,547 - Cash payments for business acquisitions, net of cash and cash equivalents acquired (1,045,240) (1,150,683) Purchases of available-for-sale securities (222,850) (825,104) Proceeds from sales of available-for-sale securities 679,345 830,903 ------------ ------------ Net cash used in investing activities (764,430) (1,354,013) FINANCING ACTIVITIES: Repurchase of common stock (599,894) (1,299,976) Net proceeds from sales of common stock under employee stock benefit plans 189,020 164,162 Proceeds from short-term borrowing - 200,000 Repayment of short-term borrowing (200,000) - Excess income tax benefit from the exercise of stock options 16,197 18,307 Repayment of other long-term liability (5,622) (9,913) Tax payments related to restricted stock issuance (14,986) (3,742) ------------ ------------ Net cash used in financing activities (615,285) (931,162) Effect of exchange rate fluctuations on cash and cash equivalents (125,018) 66,347 ------------ ------------ Decrease in cash and cash equivalents (441,192) (1,074,545) Beginning cash and cash equivalents 1,890,225 2,559,034 ------------ ------------ Ending cash and cash equivalents $ 1,449,033 $ 1,484,489 ============ ============ SYMANTEC CORPORATION Reconciliation of Non-GAAP Adjustments Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended January 2, December 28, January 2, December 28, 2009 2007 2009 2007 ------------ ------------ ------------ ------------ NET REVENUES: GAAP net revenues $ 1,513,954 $ 1,515,251 $ 4,682,286 $ 4,334,678 Deferred revenue related to acquisitions(1) 24,683 13,775 34,423 54,524 ------------ ------------ ------------ ------------ Non-GAAP net revenues $ 1,538,637 $ 1,529,026 $ 4,716,709 $ 4,389,202 ============ ============ ============ ============ GROSS PROFIT: GAAP gross profit $ 1,215,118 $ 1,216,090 $ 3,762,398 $ 3,420,727 Deferred revenue related to acquisitions(1) 24,683 13,775 34,423 54,524 Stock-based compensation (2) 3,039 3,879 10,915 12,774 Amortization of acquired product rights (3) 90,209 84,502 261,772 262,924 ------------ ------------ ------------ ------------ Gross profit adjustment 117,931 102,156 307,110 330,222 ------------ ------------ ------------ ------------ Non-GAAP gross profit $ 1,333,049 $ 1,318,246 $ 4,069,508 $ 3,750,949 ============ ============ ============ ============ OPERATING EXPENSES: GAAP operating expenses $ 7,988,020 $ 1,020,316 $ 10,039,939 $ 3,031,868 Stock-based compensation (2) (30,596) (35,541) (112,215) (108,379) Amortization of other intangible assets (3) (60,647) (54,996) (171,677) (168,847) Restructuring (4) (45,805) (23,305) (72,600) (51,883) Impairment of goodwill (5) (7,005,702) - (7,005,702) - Impairment of assets held for sale (6) (16,849) (7,342) (42,719) (93,888) Gain on sale of assets (7) - - 1,341 - Executive incentive bonuses (8) - (424) 396 (3,540) Integration (9) - - - (441) Patent settlement (10) 9,900 - 9,900 - ------------ ------------ ------------ ------------ Operating expense adjustment (7,149,699) (121,608) (7,393,276) (426,978) ------------ ------------ ------------ ------------ Non-GAAP operating expenses $ 838,321 $ 898,708 $ 2,646,663 $ 2,604,890 ============ ============ ============ ============ OPERATING (LOSS) INCOME: GAAP operating (loss) income $ (6,772,902) $ 195,774 $ (6,277,541) $ 388,859 Gross profit adjustment 117,931 102,156 307,110 330,222 Operating expense adjustment 7,149,699 121,608 7,393,276 426,978 ------------ ------------ ------------ ------------ Non-GAAP operating income $ 494,728 $ 419,538 $ 1,422,845 $ 1,146,059 ============ ============ ============ ============ NET (LOSS) INCOME: GAAP net (loss) income $ (6,806,257) $ 131,890 $ (6,479,492) $ 277,464 Gross profit adjustment 117,931 102,156 307,110 330,222 Operating expense adjustment 7,149,699 121,608 7,393,276 426,978 Gain on sale of assets (7) - (3,277) - (3,277) Settlements of litigation (10) 1,218 - 2,966 - Joint venture: Amortization of other intangible assets/stock- based compensation (11) 2,214 - 5,619 - Income tax effect on above items (12) (114,586) (60,629) (226,303) (214,306) ------------ ------------ ------------ ------------ Non-GAAP net income $ 350,219 $ 291,748 $ 1,003,176 $ 817,081 ============ ============ ============ ============ Net (loss) income PER SHARE - DILUTED: GAAP net (loss) income per share $ (8.23) $ 0.15 $ (7.76) $ 0.31 Stock-based compensation adjustment per share, net of tax (2) 0.03 $ 0.04 0.10 $ 0.10 Other non-GAAP adjustments per share, net of tax (1, 3-11) 8.62 $ 0.14 8.84 $ 0.50 ------------ ------------ ------------ ------------ Non-GAAP net income per share $ 0.42 $ 0.33 $ 1.18 $ 0.91 ============ ============ ============ ============ WEIGHTED-AVERAGE SHARES OUTSTANDING - DILUTED: GAAP weighted-average shares outstanding 826,959 876,221 834,774 893,794 ============ ============ ============ ============ Non-GAAP weighted-average shares outstanding 834,035 876,221 846,891 893,794 ============ ============ ============ ============

The non-GAAP financial measures included in the tables above are non-GAAP net revenues, non-GAAP net income and non-GAAP net income per share, which adjust for the following items: business combination accounting entries, stock-based compensation expense, restructuring charges, charges related to the amortization of intangible assets and acquired product rights, impairments of assets and certain other items. We believe the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company's operating performance for the reasons discussed below. Our management uses these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of the Company's performance to prior periods and to our peers and that investors benefit from an understanding of these non-GAAP financial measures.

(1) Fair value adjustment to deferred revenue. We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, these acquired businesses recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this revenue provides useful information to our management, as well as to investors.

(2) Stock-based compensation. Consists of expenses for employee stock options, restricted stock units, restricted stock awards and our employee stock purchase plan determined in accordance with Statement of Financial Accounting Standards ("SFAS") No. 123R, Share-Based Payment. When evaluating the performance of our individual business units and developing short and long term plans, we do not consider stock-based compensation charges. Our management team is held accountable for cash-based compensation, but we believe that management is limited in its ability to project the impact of stock-based compensation and accordingly is not held accountable for its impact on our operating results. Although stock-based compensation is necessary to attract and retain quality employees, our consideration of stock- based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies. Furthermore, unlike cash-based compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. Further, we believe it is useful to investors to understand the impact of SFAS No. 123R to our results of operations. For the three and nine months ended January 2, 2009 and December 28, 2007, respectively, stock-based compensation was allocated as follows:

 Three Months Ended Nine Months Ended January 2, December 28, January 2, December 28, 2009 2007 2009 2007 ----------- ----------- ----------- ----------- Cost of revenues $ 3,039 $ 3,879 $ 10,915 $ 12,774 Sales and marketing 14,731 14,013 52,263 42,433 Research and development 10,951 14,431 38,104 43,439 General and administrative 4,914 7,097 21,848 22,507 ----------- ----------- ----------- ----------- Total stock-based compensation $ 33,635 $ 39,420 $ 123,130 $ 121,153 =========== =========== =========== ===========

(3) Amortization of acquired product rights and other intangible assets. When conducting internal development of intangible assets, accounting rules require that we expense the costs as incurred. In the case of acquired businesses, however, we are required to allocate a portion of the purchase price to the accounting value assigned to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangibles. The acquired company, in most cases, has itself previously expensed the costs incurred to develop the acquired intangible assets, and the purchase price allocated to these assets is not necessarily reflective of the cost we would incur in developing the intangible asset. We eliminate these amortization charges from our non-GAAP operating results to provide better comparability of pre and post-acquisition operating results and comparability to results of businesses utilizing internally developed intangible assets.

(4) Restructuring. We have engaged in various restructuring activities over the past several years that have resulted in costs associated with severance, benefits, outplacement services, and excess facilities. Each restructuring has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring activities in the ordinary course of business. While our operations previously benefited from the employees and facilities covered by our various restructuring charges, these employees and facilities have benefited different parts of our business in different ways, and the amount of these charges has varied significantly from period to period. We believe that it is important to understand these charges; however, we do not believe that these charges are indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them.

(5) Impairment of goodwill. During the December quarter, given the current economic environment and a decline in our market capitalization, we concluded there were sufficient indicators to require us to perform an interim goodwill impairment analysis. We have not completed this analysis but have concluded that an impairment loss can be reasonably estimated. We expect to finalize our goodwill impairment analysis during the fourth quarter of fiscal 2009 and may make an adjustment to this charge when the goodwill impairment test is completed.

(6) Impairment of asset held for sale. Following a review of our real estate holdings we determined that certain long-term assets were underutilized. As a result, we have committed to sell certain buildings and land. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we have classified these assets as held for sale and adjusted the assets' carrying value when above the fair market value less cost to sell. During the September 2007 quarter, management determined that certain tangible and intangible assets and liabilities of the Storage and Server Management segment (formally the Data Center Management segment) did not meet the long term strategic objectives of the segment, and we recorded an impairment in the value of these assets to adjust the carrying value to the respective estimated fair value less costs to sell. On March 8, 2008 these assets were sold to a third- party. We do not believe that these charges are indicative of future operating results and believe that investors benefit from an understanding of our operating results without giving effect to them.

(7) Gain on sale of assets. During the September 2008 quarter, we sold two buildings classified as held for sale. We exclude these gains because each is a unique one-time occurrence that is not closely related to, or a function of, our ongoing operations.

(8) Executive incentive bonuses. We have excluded bonuses related to acquisitions and executive sign-on bonuses for newly hired executives. We expect the benefit from these hires and retentions to extend over an indeterminate future period, but under GAAP we are required to expense the entire cost of the bonus in the period paid. We exclude these amounts to provide better comparability of the periods that include and do not include these charges. We believe that investors benefit from an understanding of our operating results for the periods presented without giving effect to these charges.

(9) Integration. These charges consist of expenses incurred for consulting services and other professional fees associated with integration activities of acquisitions. Because these expenses are non-recurring and unique to specific acquisitions, we believe they are not indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them.

(10) Patent settlement/settlements of litigation. From time to time we are party to legal settlements. We exclude the impact of these settlements because we do not consider these settlements to be part of the ongoing operation of our business and because of the singular nature of the claims underlying the matter.

(11) Joint venture. Consistent with the reasons discussed in footnotes 2 and 3 above, we exclude stock-based compensation charges and amortization of other intangible assets related to the joint venture from our non-GAAP net income.

(12) Income tax effect on above items. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP adjustments on non-GAAP net income.

 SYMANTEC CORPORATION Reconciliation of GAAP Revenue Components to Non-GAAP Revenue Components (In thousands) (Unaudited) Three Months Ended Jan 2, 2009 ----------------------------------------------- Non-GAAP GAAP Adjustments (1) Non-GAAP --------------- -------------- --------------- Net Revenues $ 1,513,954 $ 24,683 $ 1,538,637 Revenue by Segment (2) Security and Compliance Group $ 394,612 $ 1,308 $ 395,920 Storage and Server Management Group 568,484 202 568,686 Consumer 432,289 16,022 448,311 Services 118,199 7,151 125,350 Other 370 - 370 Revenue by Geography: Americas (3) $ 827,872 $ 14,518 $ 842,390 EMEA 474,532 9,170 483,702 Asia Pacific/Japan 211,550 995 212,545 Total U.S. Revenue $ 753,832 $ 13,628 $ 767,460 Total International Revenue 760,122 11,055 771,177 Nine Months Ended Jan 2, 2009 ----------------------------------------------- Non-GAAP GAAP Adjustments (1) Non-GAAP --------------- -------------- --------------- Net Revenues $ 4,682,286 $ 34,423 $ 4,716,709 Revenue by Segment (2) Security and Compliance Group $ 1,241,251 $ 6,776 $ 1,248,027 Storage and Server Management Group 1,755,949 1,091 1,757,040 Consumer 1,342,275 19,367 1,361,642 Services 341,536 7,188 348,724 Other 1,275 1 1,276 Revenue by Geography: Americas (3) $ 2,511,149 $ 22,726 $ 2,533,875 EMEA 1,512,553 10,459 1,523,012 Asia Pacific/Japan 658,584 1,238 659,822 Total U.S. Revenue $ 2,293,811 $ 21,824 $ 2,315,635 Total International Revenue 2,388,475 12,599 2,401,074 Three Months Ended Dec 28, 2007 ----------------------------------------------- Non-GAAP GAAP Adjustments (1) Non-GAAP --------------- -------------- --------------- Net Revenues $ 1,515,251 $ 13,775 $ 1,529,026 Revenue by Segment (2) Security and Compliance Group $ 410,249 $ 8,674 $ 418,923 Storage and Server Management Group 561,695 3,460 565,155 Consumer 440,206 - 440,206 Services 102,606 1,641 104,247 Other 495 - 495 Revenue by Geography: Americas (3) $ 779,817 $ 9,258 $ 789,075 EMEA 524,981 3,879 528,860 Asia Pacific/Japan 210,453 638 211,091 Total U.S. Revenue $ 708,186 $ 9,080 $ 717,266 Total International Revenue 807,065 4,695 811,760 Nine Months Ended Dec 28, 2007 ----------------------------------------------- Non-GAAP GAAP Adjustments (1) Non-GAAP --------------- -------------- --------------- Net Revenues $ 4,334,678 $ 54,524 $ 4,389,202 Revenue by Segment (2) Security and Compliance Group $ 1,186,442 $ 32,840 $ 1,219,282 Storage and Server Management Group 1,575,231 13,552 1,588,783 Consumer 1,297,464 - 1,297,464 Services 274,477 8,132 282,609 Other 1,064 - 1,064 Revenue by Geography: Americas (3) $ 2,295,736 $ 36,431 $ 2,332,167 EMEA 1,443,270 15,555 1,458,825 Asia Pacific/Japan 595,672 2,538 598,210 Total U.S. Revenue $ 2,085,349 $ 35,803 $ 2,121,152 Total International Revenue 2,249,329 18,721 2,268,050

We include certain non-GAAP revenue and deferred revenue components in the tracking and forecasting of our revenue and management of our business. This includes non-GAAP revenue associated with deferred revenue that was excluded as a result of purchase accounting adjustments related to acquisitions. We believe the non-GAAP revenue measures set forth above are useful to investors, and such items are used by our management, because this revenue is reflective of our ongoing operating results.

(1) We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, these acquired businesses recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this revenue provides useful information to our management, as well as to investors.

(2) During the first quarter of fiscal year 2009, Altiris services' revenue was reclassified from the Security and Compliance segment to the Services segment. Data shown from the prior periods have been reclassified to match the current reporting structure.

(3) The Americas includes the United States, Latin America, and Canada.

 SYMANTEC CORPORATION Reconciliation of GAAP Deferred Revenue to Non-GAAP Deferred Revenue (in thousands) (Unaudited) As of: Jan 02, 2009 Oct 03, 2008 Jul 04, 2008 Mar 28, 2008 ------------ ------------ ------------ ------------ Deferred revenue reconciliation GAAP deferred revenue $ 2,918,612 $ 2,713,226 $ 3,011,682 $ 3,076,569 Add back: Deferred revenue related to acquisitions (1) 44,512 7,833 12,834 11,662 ------------ ------------ ------------ ------------ Non-GAAP deferred revenue $ 2,963,124 $ 2,721,059 $ 3,024,516 $ 3,088,231 ============ ============ ============ ============ Dec 28, 2007 Sep 28, 2007 Jun 29, 2007 ------------ ------------ ------------ Deferred revenue reconciliation GAAP deferred revenue $ 2,877,173 $ 2,598,597 $ 2,664,775 Add back: Deferred revenue related to acquisitions (1) 19,856 25,888 44,007 ------------ ------------ ------------ Non-GAAP deferred revenue $ 2,897,029 $ 2,624,485 $ 2,708,782 ============ ============ ============

We include certain non-GAAP revenue and deferred revenue components in the tracking and forecasting of our revenue and management of our business. This includes non-GAAP revenue associated with deferred revenue that was excluded as a result of purchase accounting adjustments related to acquisitions. We believe the non-GAAP deferred revenue measures set forth above are useful to investors, and such items are used by our management, because this revenue is reflective of our ongoing operating results.

(1) We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, these acquired businesses had recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this deferred revenue provides useful information to our management, as well as to investors.

 SYMANTEC CORPORATION Guidance - Reconciliation of Projected GAAP Revenue, GAAP Deferred Revenue and GAAP Earnings per Share to Non-GAAP Revenue, Deferred Revenue and Earnings per Share (Unaudited) Three Months Ending: April 3, 2009 -------------------- Revenue reconciliation (in millions) GAAP revenue range $ 1,475 - $ 1,525 Add back: Deferred revenue related to acquisitions (1) 15 -------------------- Non-GAAP revenue range $ 1,490 - $ 1,540 ==================== Earnings per share reconciliation GAAP earnings per share range Add back: $ 0.12 - $ 0.14 Stock-based compensation, net of tax (2) 0.04 Deferred revenue related to acquisitions, amortization of acquired product rights and other intangible assets and restructuring, net of tax (1,3,4) 0.17 -------------------- Non-GAAP earnings per share range $ 0.33 - $ 0.35 ==================== As of : April 3, 2009 -------------------- Deferred revenue reconciliation (in millions) GAAP deferred revenue range $ 2,972 - $ 3,072 Add back: Deferred revenue related to acquisitions (1) 28 -------------------- Non-GAAP deferred revenue range $ 3,000 - $ 3,100 ====================

(1) Fair value adjustment to deferred revenue. We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, these acquired businesses recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this revenue and deferred revenue provides useful information to our management, as well as to investors.

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Symantec: Symantec Delivers Solid Fiscal Third Quarter Operating Results