SOURCE: Symantec

April 30, 2008 16:05 ET

Symantec Closes Fiscal Year 2008 With Record Revenue and Earnings

Results Driven by Strong Worldwide Sales Activity and Solid Execution

CUPERTINO, CA--(Marketwire - April 30, 2008) - Symantec Corp. (NASDAQ: SYMC) today reported results of its fiscal fourth quarter and the fiscal year 2008, ended March 28, 2008. GAAP revenue for the March 2008 quarter was $1.540 billion and non-GAAP revenue was $1.548 billion, up 13 percent over the comparable period a year ago. For the fiscal year, GAAP revenue was $5.874 billion and non-GAAP revenue was $5.937 billion. On a non-GAAP basis, 2008 fiscal year revenue grew 13 percent compared to the 2007 fiscal year's non-GAAP revenue of $5.253 billion.

GAAP operating margins for the March 2008 quarter were 13.9 percent and fiscal year 2008 GAAP operating margins were 10.3 percent. Non-GAAP operating margins for the March 2008 quarter were 27.8 percent, up 540 basis points year-over-year. Fiscal year 2008 non-GAAP operating margins were 26.6 percent, up approximately 100 basis points versus fiscal year 2007.

GAAP Results: GAAP net income for the fiscal fourth quarter was $186 million, compared to $61 million for the same quarter last year. GAAP diluted earnings per share were $0.22, compared to earnings per share of $0.07 for the same quarter last year. For fiscal year 2008, Symantec reported GAAP net income of $464 million, compared to net income of $404 million for fiscal year 2007. GAAP diluted earnings per share were $0.52, up 27 percent compared to earnings per share of $0.41 for fiscal year 2007.

Non-GAAP Results: Non-GAAP net income for fiscal fourth quarter was $309 million, compared to $227 million for the same quarter last year. Non-GAAP diluted earnings per share were $0.36, up 50 percent compared to earnings per share of $0.24 for the year ago quarter. For fiscal year 2008, Symantec reported non-GAAP net income of $1.127 billion, compared to $992 million in fiscal year 2007. Non-GAAP diluted earnings per share for the year were $1.27, up 26 percent compared to earnings per share of $1.01 for fiscal year 2007. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached consolidated financial statements.

GAAP deferred revenue at the end of March 2008 was $3.077 billion. Non-GAAP deferred revenue grew 11 percent to $3.088 billion compared to $2.772 billion at the end of March 2007.

Cash flow from operating activities for the March 2008 quarter was $674 million, compared to $567 million for the March 2007 quarter. Cash flow from operating activities for fiscal year 2008 was $1.819 billion, up 9 percent compared to $1.666 billion for fiscal year 2007.

"Our team executed very well across the board and made significant progress in selling the broader portfolio of products and services to customers," said John W. Thompson, chairman and chief executive officer, Symantec. "With the strongest product portfolio we've had in years and a solid pipeline, we are well positioned for a strong start and continued success in fiscal year 2009."

Financial Highlights

For the quarter, Symantec's Storage and Server Management segment represented 37 percent of total non-GAAP revenue and grew 11 percent year-over-year. The Consumer business represented 29 percent of total non-GAAP revenue and grew 10 percent year-over-year. The Security and Compliance segment represented 28 percent of total non-GAAP revenue and grew 21 percent year-over-year. Services represented 6 percent of total non-GAAP revenue and grew 12 percent year-over-year.

International revenues represented 53 percent of total non-GAAP revenue in the March 2008 quarter and grew 15 percent year-over-year. The Europe, Middle East and Africa region represented 34 percent of total non-GAAP revenue for the quarter and grew 17 percent year-over-year. The Asia Pacific/Japan revenue for the quarter represented 15 percent of total non-GAAP revenue and grew 19 percent year-over-year. The Americas, including the United States, Latin America and Canada, represented 51 percent of total non-GAAP revenue and increased 10 percent year-over-year.

June Quarter 2008 Guidance

For the June 2008 quarter, ending July 4, 2008, GAAP revenue is estimated between $1.550 billion and $1.590 billion. GAAP diluted earnings per share are estimated between $0.17 and $0.19.

Non-GAAP revenue for the quarter is estimated between $1.555 billion and $1.595 billion. Non-GAAP diluted earnings per share are estimated between $0.34 and $0.36.

GAAP deferred revenue is expected to be in the range of $2.905 billion and $3.005 billion. Non-GAAP deferred revenue is expected to be in the range of $2.910 billion and $3.010 billion.

Cash flow from operations is expected to exceed the June 2007 result of $351 million.


Quarterly Highlights

--  Symantec signed 449 agreements worldwide versus 391 in the same period
    a year ago with a contract value of more than $300,000 each.  Of the 449
    agreements, 115 had a value of more than $1 million each versus 101 in the
    same period a year ago. In the March 2008 quarter, almost 80 percent of the
    large deals were multiple product deals.
    
--  Symantec signed new or extended agreements with customers
    including the Washington State Department of Information Services, which
    provides technology leadership for government agencies throughout
    Washington; AgFirst Farm Credit Bank, which provides funding and financial
    services for 23 farmer-owned financial cooperatives in 15 eastern states
    and Puerto Rico; Provincial Health Services Authority, one of six health
    authorities in British Columbia; CanadaCarestream Health, formerly Eastman
    Kodak Company's Health Group; Qualcomm Incorporated, a leading developer
    and innovator of advanced wireless technologies and data solutions; Gerdau
    S/A, the world's 11th largest steelmaker and the largest producer of long
    steel in the Americas; MGM MIRAGE, an entertainment and development company
    with interest in more than 20 resort properties; LG N-Sys, a leading
    provider of systems and solutions in Korea; Sun Microsystems Ltd, the UK &
    Ireland division of the Global Technology Developer; and Ersel, the Italian
    financial services company specializing in portfolio management and stock
    brokerage.
    

Conference Call

Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal fourth quarter and fiscal year 2008 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 businesses and consumers secure and manage their information. Headquartered in Cupertino, Calif., Symantec has operations in more than 40 countries. 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 projections of future revenue, earnings per share, deferred revenue and cash flow from operations, 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: 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. Additional information concerning these and other risk factors is contained in the Risk Factors section of our Form 10-K for the year ended March 30, 2007.

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) 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)



                                                        March 31,
                                             ------------------------------
                                                   2008            2007
                                             --------------  --------------
                                                (Unaudited)

ASSETS
Current assets:
 Cash and cash equivalents                   $    1,890,225  $    2,559,034
 Short-term investments                             536,728         428,619
 Trade accounts receivable, net                     758,200         666,968
 Inventories                                         34,138          42,183
 Current deferred income taxes                      193,775         165,323
 Other current assets                               316,852         208,920
                                             --------------  --------------
  Total current assets                            3,729,918       4,071,047
Property and equipment, net                       1,001,750       1,092,240
Acquired product rights, net                        648,950         909,878
Other intangible assets, net                      1,243,524       1,245,638
Goodwill                                         11,207,357      10,340,348
Investment in joint venture                         150,000               -
Other long-term assets                               55,291          63,987
Long-term deferred income taxes                      55,304          27,732
                                             --------------  --------------
  Total assets                               $   18,092,094  $   17,750,870
                                             ==============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                            $      169,631  $      149,131
 Accrued compensation and benefits                  431,345         307,824
 Current deferred revenue                         2,661,515       2,387,733
 Other current liabilities                          264,832         234,915
 Income taxes payable                                72,263         238,486
 Short-term borrowing                               200,000               -
                                             --------------  --------------
  Total current liabilities                       3,799,586       3,318,089
Convertible senior notes                          2,100,000       2,100,000
Long-term deferred revenue                          415,054         366,050
Long-term deferred tax liabilities                  219,341         343,848
Long-term income taxes payable                      478,743               -
Other long-term liabilities                         106,187          21,370
                                             --------------  --------------
  Total liabilities                               7,118,911       6,149,357
Stockholders' equity:
 Common stock                                         8,393           8,994
 Additional paid-in capital                       9,139,084      10,061,144
 Accumulated other comprehensive income             159,792         182,933
 Retained earnings                                1,665,914       1,348,442
                                             --------------  --------------
  Total stockholders' equity                     10,973,183      11,601,513
                                             --------------  --------------
    Total liabilities and stockholders'
     equity                                  $   18,092,094  $   17,750,870
                                             ==============  ==============



                           SYMANTEC CORPORATION
                Condensed Consolidated Statements of Income
              (In thousands, except earnings per share data)



                           Three Months Ended           Year Ended
                               March 31,                 March 31,
                        ------------------------  ------------------------
                           2008         2007         2008         2007
                        -----------  -----------  -----------  -----------
                                (Unaudited)       (Unaudited)

Net revenues:
 Content, subscriptions,
  and maintenance       $ 1,190,440  $ 1,051,112  $ 4,561,566  $ 3,917,572
 Licenses                   349,301      306,105    1,312,853    1,281,794
                        -----------  -----------  -----------  -----------
  Total net revenues      1,539,741    1,357,217    5,874,419    5,199,366
Cost of revenues:
 Content,
  subscriptions, and
  maintenance               206,746      210,888      826,339      823,525
 Licenses                    13,230       10,502       44,664       49,968
 Amortization of acquired
  product rights             86,403       84,873      349,327      342,333
                        -----------  -----------  -----------  -----------
  Total cost of
   revenues                 306,379      306,263    1,220,330    1,215,826
                        -----------  -----------  -----------  -----------
Gross profit              1,233,362    1,050,954    4,654,089    3,983,540
Operating expenses:
  Sales and marketing       623,592      575,546    2,415,264    2,007,651
  Research and
   development              223,314      218,468      895,242      866,882
  General and
   administrative            92,792       79,266      347,642      316,783
  Amortization of other
   purchased intangible
   assets                    56,284       49,932      225,131      201,502
  Restructuring              22,031       50,758       73,914       70,236
  Integration                     -          744            -          744
  Loss on sale of
   assets                     1,928            -       94,616            -
                        -----------  -----------  -----------  -----------
   Total operating
    expenses              1,019,941      974,714    4,051,809    3,463,798
                        -----------  -----------  -----------  -----------
Operating income            213,421       76,240      602,280      519,742
  Interest income            16,899       30,503       76,896      122,043
  Interest expense           (9,095)      (6,246)     (29,480)     (27,233)
  Settlements of
   litigation                58,500            -       58,500            -
  Other income
   (expense), net             3,444        5,568        4,327       17,070
                        -----------  -----------  -----------  -----------
Income before income
 taxes                      283,169      106,065      712,523      631,622
  Provision for income
   taxes                     96,783       45,171      248,673      227,242
                        -----------  -----------  -----------  -----------
Net income              $   186,386  $    60,894  $   463,850  $   404,380
                        ===========  ===========  ===========  ===========
Earnings per share --
 basic                  $      0.22  $      0.07  $      0.53  $      0.42
                        ===========  ===========  ===========  ===========
Earnings per share --
 diluted                $      0.22  $      0.07  $      0.52  $      0.41
                        ===========  ===========  ===========  ===========
Weighted-average shares
 outstanding -- basic       842,432      914,601      867,562      960,575
                        ===========  ===========  ===========  ===========
Weighted-average shares
 outstanding -- diluted     856,747      932,985      884,136      983,261
                        ===========  ===========  ===========  ===========



                           SYMANTEC CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)


                                                 Year Ended March 31,
                                             -----------------------------
                                                  2008            2007
                                             -------------   -------------
                                               (Unaudited)

OPERATING ACTIVITIES:

Net income                                   $     463,850   $     404,380
Adjustments to reconcile net income to net
 cash provided by operating activities:
 Depreciation and amortization                     824,109         811,443
 Stock-based compensation expense                  163,695         153,880
 Impairment of equity investments                    1,000           2,841
 Write-down of assets                                1,200               -
 Deferred income taxes                            (180,215)         11,173
 Income tax benefit from the exercise of
  stock options                                     29,443          43,118
 Excess income tax benefit from the exercise
  of stock options                                 (26,151)        (25,539)
 Loss (gain) on sale of assets                      97,463         (19,937)
 Net (gain) on settlements of litigation           (58,500)              -
 Other                                                (894)            912
 Net change in assets and liabilities,
  excluding effects of acquisitions:
    Trade accounts receivable, net                  (7,002)         33,714
    Inventories                                     10,791          10,324
    Accounts payable                                   667         (25,623)
    Accrued compensation and benefits               97,133          23,169
    Deferred revenue                               126,716         399,517
    Income taxes payable                           150,919        (181,926)
    Other                                          124,429          24,789
                                             -------------   -------------
Net cash provided by operating activities        1,818,653       1,666,235

INVESTING ACTIVITIES:

 Purchase of property and equipment               (273,807)       (419,749)
 Proceeds from sale of property and
  equipment                                        104,715         121,464
 Purchase of intangible assets                           -         (13,300)
 Cash payments for business acquisitions,
  net of cash and cash equivalents acquired     (1,162,455)        (33,373)
 Investment in Joint Venture                      (150,000)              -
 Purchases of available-for-sale securities     (1,233,954)       (226,905)
 Proceeds from sales of available-for-sale
  securities                                     1,189,283         349,408
                                             -------------   -------------
Net cash used in (provided by) investing
 activities                                     (1,526,218)       (222,455)

FINANCING ACTIVITIES:

 Sale of common stock warrants                           -         326,102
 Repurchase of common stock                     (1,499,995)     (2,846,312)
 Net proceeds from sales of common stock
  under employee stock benefit plans               224,152         230,295
 Proceeds from debt issuance                             -       2,067,299
 Purchase of bond hedge                                  -        (592,490)
 Proceeds from short-term borrowing                200,000               -
 Excess income tax benefit from the exercise
  of stock options                                  26,151          25,539
 Repayment of other long-term liability            (11,724)       (520,000)
 Tax payments related to restricted stock
  issuance                                          (4,137)              -
                                             -------------   -------------
Net cash used in financing activities           (1,065,553)     (1,309,567)
Effect of exchange rate fluctuations on cash
 and cash equivalents                              104,309         109,199
                                             -------------   -------------
(Decrease) increase in cash and cash
 equivalents                                      (668,809)        243,412
Beginning cash and cash equivalents              2,559,034       2,315,622
                                             -------------   -------------
Ending cash and cash equivalents             $   1,890,225   $   2,559,034
                                             =============   =============

Supplemental schedule of non-cash
 transactions:
Fair value of options assumed, restricted
 stock awards and restricted stock units in
 connection with acquisitions                $      35,054   $           -
Supplemental cash flow disclosures:
Income taxes paid (net of refunds) during
 the year                                    $     181,089   $     384,771
Interest expense paid during the year        $      22,659   $      10,108





                           Symantec Corporation
                  Reconciliation of Non-GAAP Adjustments
                         Statements of Operations
                  (In thousands, except per share data)
                                (Unaudited)




                           Three Months Ended            Year Ended
                                March 31,                 March 31,
                        ------------------------  ------------------------
                            2008         2007         2008         2007
                        -----------  -----------  -----------  -----------
NET REVENUES:
GAAP net revenues       $ 1,539,741  $ 1,357,217  $ 5,874,419  $ 5,199,366
 Deferred revenue
  related to
  acquisitions (1)            8,246        7,565       62,770       53,298
                        -----------  -----------  -----------  -----------
Non-GAAP net revenues   $ 1,547,987  $ 1,364,782  $ 5,937,189  $ 5,252,664
                        ===========  ===========  ===========  ===========

GROSS PROFIT:
GAAP gross profit       $ 1,233,362  $ 1,050,954  $ 4,654,089  $ 3,983,540
 Deferred revenue
  related to
  acquisitions (1)            8,246        7,565       62,770       53,298
 Stock-based
  compensation (2)            3,960        3,454       16,734       16,437
 Amortization of
  acquired product
  rights (3)                 86,403       84,873      349,327      342,333
                        -----------  -----------  -----------  -----------
  Gross profit
   adjustment                98,609       95,892      428,831      412,068
                        -----------  -----------  -----------  -----------
Non-GAAP gross profit   $ 1,331,971  $ 1,146,846  $ 5,082,920  $ 4,395,608
                        ===========  ===========  ===========  ===========

OPERATING EXPENSES:
GAAP operating expenses $ 1,019,941  $   974,714  $ 4,051,809  $ 3,463,798
 Stock-based
  compensation (2)          (38,582)     (31,639)    (146,961)    (137,403)
 Amortization of other
  intangible assets (3)     (56,284)     (49,932)    (225,131)    (201,502)
 Restructuring (4)          (22,031)     (50,758)     (73,914)     (70,236)
 Write-down of assets (5)         -            -       (1,200)           -
 Loss on sale of
  assets (6)                 (1,928)           -      (94,616)           -
 Executive incentive
  bonuses (7)                   104            -       (3,436)      (3,995)
 Integration (8)                  -         (744)        (441)        (744)
                        -----------  -----------  -----------  -----------
  Operating expense
   adjustment              (118,721)    (133,073)    (545,699)    (413,880)
                        -----------  -----------  -----------  -----------
Non-GAAP operating
 expenses               $   901,220  $   841,641  $ 3,506,110  $ 3,049,918
                        ===========  ===========  ===========  ===========

OPERATING INCOME:
GAAP operating income   $   213,421  $    76,240  $   602,280  $   519,742
 Gross profit
  adjustment                 98,609       95,892      428,831      412,068
 Operating expense
  adjustment                118,721      133,073      545,699      413,880
                        -----------  -----------  -----------  -----------
Non-GAAP operating
 income                 $   430,751  $   305,205  $ 1,576,810  $ 1,345,690
                        ===========  ===========  ===========  ===========

NET INCOME:
GAAP net income         $   186,386  $    60,894  $   463,850  $   404,380
 Gross profit
  adjustment                 98,609       95,892      428,831      412,068
 Operating expense
  adjustment                118,721      133,073      545,699      413,880
 Gain on sale of
  assets (9)                      -       (3,223)      (3,277)     (19,988)
 Settlements of
  litigation (10)           (58,500)           -      (58,500)           -
 Income tax effect on
  above items (11)          (35,786)     (59,869)    (250,092)    (217,863)
                        -----------  -----------  -----------  -----------
Non-GAAP net income     $   309,430  $   226,767  $ 1,126,511  $   992,477
                        ===========  ===========  ===========  ===========

EARNINGS PER SHARE -
 DILUTED:
GAAP earnings per share $      0.22  $      0.07  $      0.52  $      0.41
 Stock-based
  compensation
  adjustment per share,
  net of tax (2)               0.04         0.03         0.14         0.12
 Other non-GAAP
  adjustments per
  share, net of tax
  (1, 3-10)                    0.10         0.14         0.61         0.48
                        -----------  -----------  -----------  -----------
Non-GAAP earnings per
 share                  $      0.36  $      0.24  $      1.27  $      1.01
                        ===========  ===========  ===========  ===========

WEIGHTED-AVERAGE SHARES
 OUTSTANDING - DILUTED:
GAAP weighted-average
 shares outstanding         856,747      932,985      884,136      983,261
                        ===========  ===========  ===========  ===========

The non-GAAP financial measures included in the tables above are non-GAAP net revenues, non-GAAP net income and non-GAAP earnings 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, litigation settlements, write-downs 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 numerous business combinations and acquisitions for a variety of strategic purposes over the past several 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 Number 123(R), or SFAS 123(R). 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 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 123(R) to our results of operations. For the three months and twelve months ended March 31, 2008 and 2007, respectively, stock-based compensation was allocated as follows:

                                    Three Months Ended      Year Ended
                                        March 31,           March 31,
                                    ------------------- -------------------
                                      2008      2007      2008      2007
                                    --------- --------- --------- ---------
Cost of revenues                    $   3,960 $   3,454 $  16,734 $  16,437
Sales and marketing                    15,748    12,084    58,181    55,855
Research and development               14,158    12,325    57,597    57,132
General and administrative              8,676     7,230    31,183    24,416
                                    --------- --------- --------- ---------
  Total stock based compensation    $  42,542 $  35,093 $ 163,695 $ 153,840
                                    ========= ========= ========= =========

(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 this amortization charge 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) Write-down of assets. During the December 2007 quarter, we recorded a $1.2 million write-down on a facility classified as held for sale.

(6) Loss on sale of assets. 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 a write-down of $87 million to value these assets and liabilities at the respective estimated fair value. We adjusted this amount to $93 million in the December 2007 quarter and to $95 million in the March 2008 quarter. On March 8, 2008 these assets were sold to a third party.

(7) 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.

(8) 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.

(9) Gain on sale of assets. 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.

(10) Settlements of litigation. This gain represents the net effect of a charge incurred from our settlements of litigation that was pending against Veritas when we acquired it in July 2005 and a gain from our settlement of certain intellectual property-related matters. We exclude the impact of these settlements because we do not consider the defense and prosecution of these pieces of litigation to be part of the ongoing operation of our business and because of the singular nature of the claims underlying each matter.

(11) 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)

                                                FY 2008
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     5,874,419 $       62,770  $     5,937,189

Revenue by Segment (2)
 Security & Compliance
  Group                     $     1,630,133 $       47,382  $     1,677,515
 Storage and Server
  Management Group                2,136,307         15,386        2,151,693
 Consumer                         1,746,089              -        1,746,089
 Services                           359,955              -          359,955
 Other (3)                  $         1,935 $            2  $         1,937

Revenue by Geography:
 Americas (4)               $     3,095,492 $       42,482  $     3,137,974
 EMEA                             1,963,319         17,349        1,980,668
 Asia Pacific/Japan         $       815,608 $        2,939  $       818,547

Total U.S. Revenue          $     2,814,444 $       41,783  $     2,856,227
Total International Revenue $     3,059,975 $       20,987  $     3,080,962



                                    Three Months Ended Mar 31, 2008
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     1,539,741 $        8,246  $     1,547,987

Revenue by Segment (2)
 Security & Compliance
  Group                     $       432,559 $        6,410  $       438,969
 Storage and Server
  Management Group                  561,076          1,834          562,910
 Consumer                           448,625              -          448,625
 Services                            96,610              -           96,610
 Other (3)                  $           871 $            2  $           873

Revenue by Geography:
 Americas (4)               $       799,756 $        6,051  $       805,807
 EMEA                               520,049          1,794          521,843
 Asia Pacific/Japan         $       219,936 $          401  $       220,337

Total U.S. Revenue          $       729,095 $        5,980  $       735,075
Total International Revenue $       810,646 $        2,266  $       812,912



                                    Three Months Ended Dec 31, 2007
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     1,515,251 $       13,775  $     1,529,026

Revenue by Segment (2)
 Security & Compliance
  Group                     $       416,666 $       10,315  $       426,981
 Storage and Server
  Management Group                  561,695          3,460          565,155
 Consumer                           440,206              -          440,206
 Services                            96,189              -           96,189
 Other (3)                  $           495 $            -  $           495

Revenue by Geography:
 Americas (4)               $       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



                                    Three Months Ended Sep 30, 2007
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     1,419,089 $       18,243  $     1,437,332

Revenue by Segment (2)
 Security & Compliance
  Group                     $       391,287 $       13,845  $       405,132
 Storage and Server
  Management Group                  507,956          4,398          512,354
 Consumer                           433,508              -          433,508
 Services                            86,010              -           86,010
 Other (3)                  $           328 $            -  $           328

Revenue by Geography:
 Americas (4)               $       764,470 $       12,222  $       776,692
 EMEA                               460,485          5,191          465,676
 Asia Pacific/Japan         $       194,134 $          830  $       194,964

Total U.S. Revenue          $       695,517 $       12,027  $       707,544
Total International Revenue $       723,572 $        6,216  $       729,788



                                    Three Months Ended Jun 30, 2007
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     1,400,338 $       22,506  $     1,422,844

Revenue by Segment (2)
 Security & Compliance
  Group                     $       389,621 $       16,812  $       406,433
 Storage and Server
  Management Group                  505,580          5,694          511,274
 Consumer                           423,750              -          423,750
 Services                            81,146              -           81,146
 Other (3)                  $           241 $            -  $           241

Revenue by Geography:
 Americas (4)               $       751,449 $       14,951  $       766,400
 EMEA                               457,804          6,485          464,289
 Asia Pacific/Japan         $       191,085 $        1,070  $       192,155

Total U.S. Revenue          $       681,646 $       14,696  $       696,342
Total International Revenue $       718,692 $        7,810  $       726,502



SYMANTEC CORPORATION

Reconciliation of GAAP Revenue

(In thousands)

(Unaudited)

                                                FY 2007
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     5,199,366 $       53,298  $     5,252,664

Revenue By Segment: (2)
 Security & Compliance
  Group                     $     1,408,906 $        3,779  $     1,412,685
 Storage and Server
  Management Group                1,906,607         49,317        1,955,924
 Consumer                         1,590,505              -        1,590,505
 Services                           293,226            202          293,428
 Other (3)                  $           122 $            -  $           122


Revenue by Geography:
 Americas (4)               $     2,840,570 $       35,495  $     2,876,065
 EMEA                             1,644,177         13,244        1,657,421
 Asia Pacific/Japan         $       714,619 $        4,559  $       719,178

Total U.S. Revenue          $     2,560,194 $       33,403  $     2,593,597
Total International Revenue $     2,639,172 $       19,895  $     2,659,067



                                    Three Months Ended Mar 31, 2007
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     1,357,217 $        7,565  $     1,364,782

Revenue By Segment: (2)
 Security & Compliance
  Group                     $       360,722 $          572  $       361,294
 Storage and Server
  Management Group                  501,790          6,993          508,783
 Consumer                           408,200              -          408,200
 Services                            86,439              -           86,439
 Other (3)                  $            66 $            -  $            66


Revenue by Geography:
 Americas (4)               $       729,747 $        4,711  $       734,458
 EMEA                               442,395          2,339          444,734
 Asia Pacific/Japan         $       185,075 $          515  $       185,590

Total U.S. Revenue          $       654,748 $        4,401  $       659,149
Total International Revenue $       702,469 $        3,164  $       705,633



                                   Three Months Ended Dec 31, 2006
                            ----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------  --------------  --------------

Net Revenues                $    1,315,873  $       10,468  $    1,326,341

Revenue By Segment: (2)
 Security & Compliance
  Group                     $      361,467  $          823  $      362,290
 Storage and Server
  Management Group                 479,758           9,645         489,403
 Consumer                          406,145               -         406,145
 Services                           68,517               -          68,517
 Other (3)                  $          (14) $            -  $          (14)


Revenue by Geography:
 Americas (4)               $      720,611  $        6,832  $      727,443
 EMEA                              417,813           2,987         420,800
 Asia Pacific/Japan         $      177,449  $          649  $      178,098

Total U.S. Revenue          $      650,721  $        6,467  $      657,188
Total International Revenue $      665,152  $        4,001  $      669,153



                                   Three Months Ended Sep 30, 2006
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     1,260,408 $       12,984  $     1,273,392

Revenue By Segment: (2)
 Security & Compliance
  Group                     $       340,452 $          948  $       341,400
 Storage and Server
  Management Group                  459,151         12,036          471,187
 Consumer                           394,382              -          394,382
 Services                            66,356              -           66,356
 Other (3)                  $            67 $            -  $            67


Revenue by Geography:
 Americas (4)               $       696,367 $        9,071  $       705,438
 EMEA                               386,422          3,166          389,588
 Asia Pacific/Japan         $       177,619 $          747  $       178,366

Total U.S. Revenue          $       628,614 $        8,659  $       637,273
Total International Revenue $       631,794 $        4,325  $       636,119



                                    Three Months Ended Jun 30, 2006
                            -----------------------------------------------
                                              Non-GAAP
                                 GAAP       Adjustments (1)    Non-GAAP
                            --------------- --------------  ---------------

Net Revenues                $     1,265,868 $       22,281  $     1,288,149

Revenue By Segment: (2)
 Security & Compliance
  Group                     $       346,265 $        1,436  $       347,701
 Storage and Server
  Management Group                  465,908         20,643          486,551
 Consumer                           381,778              -          381,778
 Services                            71,914            202           72,116
 Other (3)                  $             3 $            -  $             3


Revenue by Geography:
 Americas (4)               $       693,845 $       14,881  $       708,726
 EMEA                               397,547          4,752          402,299
 Asia Pacific/Japan         $       174,476 $        2,648  $       177,124

Total U.S. Revenue          $       626,111 $       13,876  $       639,987
Total International Revenue $       639,757 $        8,405  $       648,162


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 numerous business combinations and acquisitions for a variety of strategic purposes over the past several years. As is the case with our existing business, at the time of acquisition, acquired business 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 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 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 March 2008 quarter, we modified the segment reporting structure to more readily match business operational changes as a result of the January 2008 promotion of Enrique Salem to Chief Operating Officer of Symantec. The following changes have been made to our segment reporting structure: (i) the Security and Data Management Group is now known as the Security and Compliance Group; (ii) the Altiris segment, in its entirety, has been moved into the Security and Compliance Group; (iii) the Data Center Management Group is now known as the Storage and Server Management Group; and (iv) we have moved the Backup Exec products to the Storage and Server Management Group from the Security and Data Management Group. There were no changes to the Consumer, Services, or Other segments. The new business structure more directly aligns the operating segments with markets and customers, and we believe will establish more direct lines of reporting responsibilities, speed decision making, and enhance the ability to pursue strategic growth opportunities. Data shown from the prior periods have been reclassified to match the current reporting structure.

(3) Other includes product lines nearing the end of their life cycle. See Item 15, Footnote 15 in our March 2007 10-K.

(4) 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)

  Balances as of:       Jun 30, 2006 Sep 30, 2006 Dec 31, 2006 Mar 31, 2007
                        ------------ ------------ ------------ ------------
Deferred revenue
 reconciliation

GAAP deferred revenue   $  2,305,334 $  2,325,355 $  2,559,201 $  2,753,783
  Add back:
  Deferred revenue
   related to
   acquisitions (1)           35,247       22,263       25,448       17,958
                        ------------ ------------ ------------ ------------
Non-GAAP deferred
 revenue                $  2,340,581 $  2,347,618 $  2,584,649 $  2,771,741
                        ============ ============ ============ ============




  Balances as of:       Jun 30, 2007 Sep 30, 2007 Dec 31, 2007 Mar 31, 2008
                        ------------ ------------ ------------ ------------
Deferred revenue
 Reconciliation

GAAP deferred revenue   $  2,664,775 $  2,598,597 $  2,877,173 $  3,076,569
  Add back:
  Deferred revenue
   related to
   acquisitions (1)           44,007       25,888       19,856       11,662
                        ------------ ------------ ------------ ------------
Non-GAAP deferred
 revenue                $  2,708,782 $  2,624,485 $  2,897,029 $  3,088,231
                        ============ ============ ============ ============

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 numerous business combinations and acquisitions for a variety of strategic purposes over the past several 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, Deferred Revenue
       and Earnings per Share to Non-GAAP Revenue, Deferred Revenue
                          and Earnings per Share
                               (Unaudited)

                                                        Three Months Ended:
                                                           June 30, 2008
                                                        -------------------
Revenue reconciliation (in millions)

GAAP revenue range                                       $ 1,550 - $ 1,590
   Add back:
   Deferred revenue related to acquisitions (1)                          5
                                                        -------------------
Non-GAAP revenue range                                   $ 1,555 - $ 1,595
                                                        ===================



Earnings per share reconciliation

GAAP earnings per share range                              $ 0.17 - $ 0.19
   Add back:
   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)                                                           0.13
                                                        -------------------
Non-GAAP earnings per share range                          $ 0.34 - $ 0.36
                                                        ===================


                                                               As of:
                                                           June 30, 2008
                                                        -------------------
Deferred revenue reconciliation (in millions)

GAAP deferred revenue range                              $ 2,905 - $ 3,005
   Add back:
   Deferred revenue related to acquisitions (1)                          5
                                                        -------------------
Non-GAAP deferred revenue range                          $ 2,910 - $ 3,010
                                                        ===================

We believe the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the Company's operating performance by excluding certain items that may not be indicative of the Company's core business, operating results or future outlook. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing the Company's operating results both as a consolidated entity and at the business unit level, 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. These measures are used by our management for the reasons associated with each of the adjusting items as described below.

(1) Fair value adjustment to deferred revenue. We have completed numerous business combinations and acquisitions for a variety of strategic purposes over the past several 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.

(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 Number 123(R), or SFAS 123(R). 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 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 123(R) to our results of operations.

(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 this amortization charge 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.

Contact Information