EX-99.01 2 f26671exv99w01.htm EXHIBIT 99.01 exv99w01
 

EXHIBIT 99.01
News Release
     
MEDIA CONTACT:
  INVESTOR CONTACT:
Yunsun Wee
  Helyn Corcos
Symantec Corporation
  Symantec Corporation
310-449-7009
  408-517-8324
ywee@symantec.com
  hcorcos@symantec.com
SYMANTEC REPORTS THIRD QUARTER 2007 RESULTS
Company announces $200 million in cost savings target
CUPERTINO, Calif. — Jan. 24, 2007 — Symantec Corp. (Nasdaq: SYMC) today reported results for the third quarter of fiscal year 2007, ended Dec. 29, 2006. GAAP revenue for the quarter was $1.313 billion and non-GAAP revenue was $1.324 billion. Non-GAAP revenue grew 6 percent over the comparable period a year ago.
GAAP deferred revenue at the end of the December 2006 quarter was $2.46 billion. Non-GAAP deferred revenue at the end of the quarter reached $2.49 billion, growing 25 percent compared to the December 2005 quarter.
GAAP Results: GAAP net income for the fiscal third quarter was $114 million, compared to $91 million for the same quarter last year. Diluted earnings per share was $0.12 compared to $0.08 per share for the same quarter last year.
Non-GAAP Results: Non-GAAP net income for the fiscal third quarter was $248 million, compared to $282 million for the same quarter last year. Non-GAAP diluted earnings per share was $0.26 in both periods. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached consolidated financial statements.
“With a disappointing quarter behind us, we are moving to better align our costs with our new revenue expectations,” said John W. Thompson, Symantec chairman and chief executive officer. “I am confident that we have the right strategy in place; however, we must sharpen our execution.”
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Symantec Reports Third Quarter 2007 Results
Page 2 of 4
Financial Highlights
For the quarter, Symantec’s Consumer business represented 31 percent of total revenue and grew 24 percent year-over-year on a non-GAAP basis. Services represented 4 percent of total revenue and grew 8 percent year-over-year. The Security and Data Management business represented 39 percent of total revenue and grew 3 percent year-over-year. The Data Center Management business represented 26 percent of total revenue and declined 8 percent year-over-year.
International revenues represented 50 percent of total revenue in the third quarter and grew 7 percent year-over-year on a non-GAAP basis. The Asia Pacific/Japan revenue for the quarter represented 14 percent of total revenue and grew 11 percent year-over-year. The Americas, including the United States, Latin America, and Canada, represented 55 percent of total revenue and increased 5 percent year-over-year. The Europe, Middle East, and Africa region represented 31 percent of total revenue for the quarter and grew 5 percent year-over-year.
Cost-Saving Initiative
In order to align costs with new revenue expectations, Symantec plans to reduce its cost structure by $200 million. The company has identified a number of areas to achieve its target: reduce new hires; reduce contractor and consulting spending; reduce travel spending; consolidate additional facilities; and reduce the current workforce in certain business functions and geographies.
March Quarter and Fiscal Year 2007 Guidance
Symantec is reaffirming its revised guidance provided on Tuesday, Jan. 16, 2007. The impact of the cost saving initiative is expected to be modest in the March 2007 quarter and has been taken into account in the guidance.
For the March 2007 quarter, GAAP revenue is estimated between $1.24 billion and $1.27 billion. GAAP diluted earnings per share for the March quarter is estimated between $0.04 and $0.06. For the fiscal year ending March 2007, GAAP revenue is estimated in the range of $5.08 billion to $5.11 billion. GAAP diluted earnings per share is estimated between $0.36 and $0.39. It is possible, however, that there will be a restructuring charge related to the cost savings efforts that would affect GAAP earnings for the March 2007 quarter.
Non-GAAP revenue for the March 2007 quarter is estimated between $1.25 billion and $1.28 billion. Non-GAAP diluted earnings per share is estimated between $0.18 and $0.20. For the fiscal year ending March 2007, non-GAAP revenue is estimated in the range of $5.13 billion to $5.16 billion. Non-GAAP diluted earnings per share is estimated between $0.92 and $0.95.
Deferred revenue is expected to be in the range of $2.60 billion and $2.65 billion. Cash flow from operations is expected to be of the order of $1.5 billion.
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Symantec Reports Third Quarter 2007 Results
Page 3 of 4
Quarterly Highlights
  Symantec signed 389 contracts worldwide worth more than $300,000 each, including 112 worth more than $1 million each, during the quarter. Of those 389 contracts, nearly 80 percent were multiple product deals.
 
  In North America, Symantec signed new or extended agreements with customers including Devon Energy Corp., one of the largest independent oil and gas producers and processors of natural gas and natural gas liquids in North America; Nortel, a global leader in delivering communications capabilities; Palm Inc., a leader in mobile computing; Savvis, Inc., global leader in IT infrastructure services for business applications; and United States Postal Service, which delivers 213 billion pieces of mail to more than 146 million homes, businesses and Post Office boxes in virtually every state, city, and town in the United States.
 
  New or extended agreements with international customers included Absa Group Limited, one of South Africa’s largest financial services organizations; ANZ, a major Australian financial institution; Bank of Communications Co., Ltd, one of the famous commercial banks of China; Beijing Mobile and Hebei Mobile, subsidiaries of China Mobile Ltd., the leading mobile services provider in China; CTI Móvil, a subsidiary of América Móvil, S.A. de C.V., the leading provider of wireless services in Latin America with more than 115 million wireless subscribers as of October 2006; Fujian Telecom, a subsidiary of China Telecom Corporation Limited; HDFC, a leading Indian private sector bank with more than 400 branches and offices nationwide; KAZ, the largest Australian owned ICT company and a leading provider of managed IT services; Malam Communications, a specialist in a variety of IT solutions serving hundreds of customers in all sectors of economy; Mindware SA, a leading distributor of quality IT products to the Middle East and North Africa; Mobile Telephone Networks (MTN), a GSM cellular network operator delivering services in 21 countries in Africa and the Middle East; National Commodity & Derivatives Exchange Limited (NCDEX), a national-level, professionally managed, online commodity exchange; Rostelekom, Russia’s national long-distance telecom carrier; The Suncorp Group, one of Australia’s leading banking, insurance, investment and superannuation organizations; and WIPRO Limited, the world’s largest independent R&D Services Provider.
Conference Call
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss results from the fiscal third quarter, ended Dec. 29, 2006, and to review guidance for the fiscal year 2007. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest/index.html. 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.
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Symantec Reports Third Quarter 2007 Results
Page 4 of 4
About Symantec
Symantec is a global leader in infrastructure software, enabling businesses and consumers to have confidence in a connected world. The company helps customers protect their infrastructure, information, and interactions by delivering software and services that address risks to security, availability, compliance, and performance. Headquartered in Cupertino, Calif., Symantec has operations in 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 and earnings per share for the fourth quarter and fiscal year 2007, and projections of deferred revenue, cash flow from operations, amortization of acquisition-related intangibles and stock-based compensation. 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; and any potential effects of Staff Accounting Bulletin 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” which we will be required to adopt in the fourth quarter of fiscal year 2007, on our results of operations and financial conditions. 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 31, 2006 and our Form 10-Q for the quarter ended Sept. 30, 2006. We assume no obligation to update any forward-looking information contained in this press release.
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/center.html.

 


 

SYMANTEC CORPORATION
Consolidated Balance Sheets
(In thousands, except per share data)
                 
    December 31,     March 31,  
    2006     2006  
    (unaudited)          
ASSETS
               
Current assets:
               
Cash and short-term investments
  $ 2,977,610     $ 2,865,802  
Trade accounts receivable, net
    742,989       670,937  
Inventories
    41,240       48,687  
Current deferred income taxes
    154,673       131,833  
Other current assets
    210,017       190,673  
 
           
Total current assets
    4,126,529       3,907,932  
Property and equipment, net
    1,038,526       946,217  
Acquired product rights, net
    992,638       1,238,511  
Other intangible assets, net
    1,295,445       1,440,873  
Goodwill
    10,352,430       10,331,045  
Other long-term assets
    94,148       48,605  
 
           
 
  $ 17,899,716     $ 17,913,183  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Convertible subordinated notes
  $     $ 512,800  
Accounts payable
    198,622       167,135  
Accrued compensation and benefits
    301,142       277,170  
Current deferred revenue
    2,113,056       1,915,179  
Other accrued expenses
    186,193       185,882  
Income taxes payable
    343,148       419,401  
 
           
Total current liabilities
    3,142,161       3,477,567  
Convertible senior notes
    2,100,000        
Long-term deferred revenue
    349,466       248,273  
Long-term deferred tax liabilities
    231,240       493,956  
Other long-term obligations
    22,118       24,916  
Stockholders’ equity:
               
Common stock
    9,275       10,409  
Capital in excess of par value
    10,511,659       12,426,690  
Accumulated other comprehensive income
    188,574       146,810  
Deferred stock-based compensation
          (43,595 )
Retained earnings
    1,345,223       1,128,157  
 
           
Total stockholders’ equity
    12,054,731       13,668,471  
 
           
 
  $ 17,899,716     $ 17,913,183  
 
           

 


 

SYMANTEC CORPORATION
GAAP Consolidated Statements of Operations
(In thousands, except per share data)
                                 
    Three Months Ended     Nine Months Ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
    (unaudited)     (unaudited)  
Net revenues
  $ 1,313,040     $ 1,149,026     $ 3,834,199     $ 2,904,832  
Cost of revenues:
                               
Cost of revenues
    230,212       183,442       662,271       473,194  
Amortization of acquired product rights
    84,511       85,036       257,460       225,521  
 
                       
Cost of revenues
    314,723       268,478       919,731       698,715  
Gross profit
    998,317       880,548       2,914,468       2,206,117  
Operating expenses:
                               
Sales and marketing
    493,378       437,183       1,420,366       1,055,229  
Research and development
    219,578       193,191       657,746       479,605  
General and administrative
    79,040       64,335       238,887       157,145  
Amortization of other intangible assets
    50,476       48,427       151,569       98,475  
Acquired in-process research and development
                      284,000  
Restructuring
          15,566       19,478       20,492  
Integration
          2,185             15,339  
Patent settlement
                      2,200  
 
                       
Total operating expenses
    842,472       760,887       2,488,046       2,112,485  
Operating income
    155,845       119,661       426,422       93,632  
Interest and other income, net
    24,845       22,525       103,045       85,246  
Interest expense
    (6,257 )     (6,843 )     (20,988 )     (14,346 )
 
                       
Income before income taxes
    174,433       135,343       508,479       164,532  
Provision for income taxes
    60,711       44,609       176,532       126,493  
 
                       
Net income
  $ 113,722     $ 90,734     $ 331,947     $ 38,039  
 
                       
Net income per share — diluted
  $ 0.12     $ 0.08     $ 0.33     $ 0.04  
 
                       
 
                               
Shares used to compute net income per share — diluted
    963,309       1,096,609       1,000,020       1,012,956  
 
                       

 


 

SYMANTEC CORPORATION
Reconciliation of Consolidated Statements of
Operations to Non-GAAP Statements of Operations
(In thousands, except per share data)
(Unaudited)
                                     
        Three Months Ended     Nine Months Ended  
        December 31,     December 31,  
        2006     2005     2006     2005  
NET REVENUES:
                                   
GAAP net revenues
      $ 1,313,040     $ 1,149,026     $ 3,834,199     $ 2,904,832  
Fair value adjustment to Veritas deferred revenue
  (A)     10,469       104,201       45,736       240,481  
Veritas net revenue
  (B)                       559,258  
 
                           
Non-GAAP net revenues
      $ 1,323,509     $ 1,253,227     $ 3,879,935     $ 3,704,571  
 
                           
 
                                   
NET INCOME :
                                   
GAAP net income:
      $ 113,722     $ 90,734     $ 331,947     $ 38,039  
Fair value adjustment to Veritas deferred revenue
  (A)     10,469       104,201       45,736       240,481  
Amortization of acquired product rights
  (C)     84,511       85,036       257,460       297,672  
Executive incentive bonuses
  (D)     897       2,179       3,954       5,231  
Stock-based compensation
  (E)     36,117       12,329       118,787       34,137  
Restructuring
  (F)           15,566       19,478       20,492  
Integration
  (G)           2,185             27,016  
Amortization of other intangible assets
  (H)     50,476       48,427       151,569       145,239  
Patent settlement
  (I)                       2,200  
Gain on sale of strategic investments
  (J)                       (732 )
Proposed Veritas SEC legal settlement
  (K)                       30,000  
Acquired in-process research and development
  (L)                       284,000  
Gain on sale of assets
  (M)                 (16,768 )      
Income tax effect on above items
  (N)     (48,434 )     (78,295 )     (157,991 )     (244,520 )
Veritas net loss
  (O)                       (13,492 )
 
                           
Non-GAAP net income
      $ 247,758     $ 282,362     $ 754,172     $ 865,763  
 
                           
 
                                   
NET INCOME PER SHARE — DILUTED:
                                   
GAAP net income per share
      $ 0.12     $ 0.08     $ 0.33     $ 0.04  
Stock-based compensation adjustment per share
  (E)     0.03       0.01       0.09       0.03  
Other non-GAAP adjustments per share
  (A-D, F-O)     0.11       0.17       0.33       0.67  
 
                           
Non-GAAP net income per share
      $ 0.26     $ 0.26     $ 0.75     $ 0.74  
 
                           
 
                                   
SHARES USED TO COMPUTE NET INCOME PER SHARE — DILUTED:
                                   
GAAP Shares used to compute net income per share
        963,309       1,096,609       1,000,020       1,012,956  
Converted incremental Veritas shares*
                          162,305  
 
                           
Non-GAAP Shares used to compute net income per share
        963,309       1,096,609       1,000,020       1,175,261  
 
                           
 
*   Converted incremental Veritas shares equals Veritas historical shares multiplied by the exchange ratio of 1.1242.
The non-GAAP financial measures included in the table above are non-GAAP net revenue, non-GAAP net income and non-GAAP net income per share, which adjust for the following items: business combination accounting entries, expenses related to acquisitions, stock-based compensation expense, restructuring charges and charges related to the amortization of other intangible assets, and certain other items. We believe that the presentation of these non-GAAP financial measures is useful to investors, and such measures are used by our management, for the reasons associated with each of the adjusting items as described below.
(A) Fair value adjustment to Veritas deferred revenue. We include revenue associated with Veritas deferred revenue that was excluded as a result of purchase accounting adjustments to fair value because we believe they are reflective of ongoing operating results.
(B) Veritas’ net revenue. This amount represents Veritas’ net revenue for the three months ended March 31, 2005. We include Veritas’ net revenue because we believe it is useful in comparing the ongoing operating results of the combined company with pre-merger results of the two companies.
(C) Amortization of acquired product rights. The amounts recorded as amortization of acquired product rights arise from prior acquisitions and are non-cash in nature. We exclude these expenses because we believe they are not reflective of ongoing operating results in the period incurred and are not directly related to the operation of our business.

 


 

(D) Executive incentive bonuses. Consists of bonuses related to the Veritas acquisition and executive sign-on bonuses for newly hired executives. We exclude these amounts because they arise from prior acquisitions and other infrequent events and we believe they are not directly related to the operation of our business. For the three and nine months ended December 30, 2006 and 2005, executive incentive bonuses were allocated as follows:
                                 
    Three months ended   Nine months ended
    December 31,   December 31,
    2006   2005   2006   2005
            (In thousands)        
Sales and marketing
  $ 339     $ 798     $ 1,552     $ 1,568  
Research and development
    558       609       1,802       1,366  
General and administrative
          772       600       2,297  
     
Total executive incentive bonuses
  $ 897     $ 2,179     $ 3,954     $ 5,231  
     
 
(E) Stock-based compensation. Consists of expenses for employee stock options, restricted stock units, and employee stock purchase plan determined in accordance with APB 25 and SFAS 123(R) pre and post adoption of SFAS 123(R) on April 1, 2006, respectively. We exclude these stock-based compensation expenses because they are non-cash expenses that we believe are not reflective of ongoing operating results. Further, we believe it is useful to investors to understand the impact of the application of SFAS 123(R) to our results of operations. For the three and nine months ended December 31, 2006 and 2005, stock-based compensation was allocated as follows:
                 
    Three months ended   Nine months ended
    December 31,   December 31,
    2006   2006
    (in thousands)
Cost of revenues
  $ 3,819     $ 12,983  
Sales and marketing
    12,520       43,811  
Research and development
    13,803       44,807  
General and administrative
    5,975       17,186  
     
Total stock-based compensation expenses
  $ 36,117     $ 118,787  
     
                                                 
            Three months ended                   Nine months ended    
            December 31,                   December 31,    
            2005                   2005    
    Symantec   Veritas   Total   Symantec   Veritas   Total
    (in thousands)           (In thousands)        
Cost of revenues
  $     $     $     $     $ 901     $ 901  
Sales and marketing
    4,089             4,089       9,352       1,482       10,834  
Research and development
    5,658             5,658       13,526       2,062       15,588  
General and administrative
    2,582             2,582       5,625       1,189       6,814  
         
Total stock-based compensation expenses
  $ 12,329     $     $ 12,329     $ 28,503     $ 5,634     $ 34,137  
         
 
(F) Restructuring. These amounts arise from severance, benefits, outplacement services, and excess facilities resulting from our company restructurings and we believe they are not directly related to the operation of our business.
(G) Integration. Consists of expenses incurred for consulting services and other professional fees associated with the integration activities for our acquisition of Veritas. These expenses arose from a specific prior acquisition and we believe they are not directly related to the operation of our business. Operating expenses for the three and nine months ended December 31, 2006 did not include integration expenses. For the three and nine months ended December 31, 2005, integration expenses were allocated as follows:
                                                 
            Three months ended                   Nine months ended    
            December 31,                   December 31,    
            2005                   2005    
    Symantec   Veritas   Total   Symantec   Veritas   Total
            (in thousands)           (in thousands)        
Cost of revenues
  $     $     $     $     $ 1,057     $ 1,057  
Sales and marketing
    2             2       2,339       3,094       5,433  
Research and development
    1             1       1,158       2,700       3,858  
General and administrative
    2,182             2,182       11,842       4,826       16,668  
         
Total integration expenses
  $ 2,185     $     $ 2,185     $ 15,339     $ 11,677     $ 27,016  
         
 
(H) Amortization of other intangible assets. The amounts recorded as amortization of other intangible assets arise from prior acquisitions and are non-cash in nature. We exclude these expenses because we believe they are not reflective of ongoing operating results in the period incurred and not directly related to the operation of our business.
(I) Patent settlement. On May 12, 2005, we resolved the Altiris patent litigation matter with a cross-licensing agreement that resolved all legal claims between the companies. We exclude the amount of this settlement that was attributed to benefits in and prior to the period in which the settlement was reached because it arose from a specific litigation matter and we believe it is not directly related to the operation of our business.
(J) Gain on sale of strategic investments. We have equity investments in privately held companies for business and strategic purposes. We exclude the gain on sale of strategic investments because we believe it is not reflective of ongoing operating results in the period incurred and is not directly related to the operation of our business.
(K) Proposed Veritas SEC legal settlement. Prior to our acquisition of Veritas, Veritas accrued a $30 million penalty based on settlement discussions with the SEC. We include this settlement because we include the Veritas net loss, per note O below, and we do not believe this settlement was directly related to the operation of Veritas’ business.
(L) Acquired in-process research and development. The amounts recorded as acquired in-process research and development arise from prior acquisitions and are non-cash in nature. We exclude these expenses because we believe they are not reflective of ongoing operating results in the period incurred and not directly related to the operation of our business.
(M) Gain on sale of assets. During the September 2006 quarter, we sold our Milpitas land and buildings for a gain. We exclude the gain on sale of the building because we believe it is not reflective of ongoing operating results in the period incurred and is not directly related to the operation of our business.
(N) 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 operating income.
(O) Veritas net loss. This amount represents Veritas net loss for the three months ended March 31, 2005. We include the Veritas net loss because we believe it is useful in comparing the ongoing operating results of the combined company with pre-merger results of the two companies.

 


 

SYMANTEC CORPORATION
Reconciliation of GAAP Revenue Components to Non-GAAP Revenue Components
(In thousands, except per share data)
(Unaudited)
                                                 
    Three Months Ended December 31, 2006   Three Months Ended December 31, 2005
    GAAP   Non-GAAP           GAAP   Non-GAAP    
    Symantec   Adjustments   Non-GAAP   Symantec   Adjustments   Non-GAAP
         
Net Revenues
  $ 1,313,040     $ 10,469 A     $ 1,323,509     $ 1,149,026     $ 104,201 A     $ 1,253,227  
 
Revenue By Segment:
                                               
Security and Data Management
  $ 515,215     $ 3,646 A     $ 518,861     $ 470,713     $ 33,393 A     $ 504,106  
Data Center Management
  $ 336,194     $ 6,823 A     $ 343,017     $ 303,272     $ 68,099 A     $ 371,371  
Services
  $ 52,844     $ A     $ 52,844     $ 45,998     $ 2,709 A     $ 48,707  
Consumer
  $ 408,789     $ A     $ 408,789     $ 329,036     $ A     $ 329,036  
Other
  $ (2 )   $ A     $ (2 )   $ 7     $ A     $ 7  
 
                                               
Revenue by Geography:
                                               
Americas (*)
  $ 721,495     $ 6,832 A     $ 728,327     $ 621,682     $ 72,732 A     $ 694,414  
EMEA
  $ 413,377     $ 2,988 A     $ 416,365     $ 374,882     $ 23,505 A     $ 398,387  
Asia Pacific/Japan
  $ 178,168     $ 649 A     $ 178,817     $ 152,462     $ 7,964 A     $ 160,426  
 
                                               
Total U.S. Revenue
  $ 652,412     $ 6,467 A     $ 658,879     $ 564,977     $ 68,255 A     $ 633,232  
Total International Revenue
  $ 660,628     $ 4,002 A     $ 664,630     $ 584,049     $ 35,946 A     $ 619,995  
We believe the non-GAAP revenue measures set forth above are useful to investors, and such items are used by our management, because revenue associated with Veritas deferred revenue that was excluded as a result of purchase accounting adjustments to fair value is reflective of ongoing operating results.
 
*   The Americas revenue includes the U.S., Latin America, and Canada.
 
Footnotes:
 
A   To include Veritas’ deferred revenue that was excluded as a result of adjustments to fair value.

 


 

SYMANTEC CORPORATION
Reconciliation of GAAP deferred revenue
to non-GAAP deferred revenue
(Unaudited)
                 
    December 31, 2006     December 31, 2005  
Deferred revenue reconciliation (in thousands)
               
GAAP deferred revenue
  $ 2,462,522     $ 1,868,660  
 
               
Add back:
               
Fair value adjustment to Veritas deferred revenue (*)
    25,448       118,836  
 
           
 
Non-GAAP deferred revenue (**)
  $ 2,487,970     $ 1,987,496  
 
           
 
(*)   Fair value adjustment to Veritas deferred revenue. We include revenue associated with Veritas deferred revenue that was excluded as a result of purchase accounting adjustments to fair value because we believe it is reflective of ongoing operating results.
 
(**)   We believe that providing the non-GAAP item set forth above is useful to investors, and such item is used by our management, for the reasons associated with the adjusting item as described above.

 


 

SYMANTEC CORPORATION
Reconciliation of projected GAAP revenue and earnings per share
to non-GAAP revenue and earnings per share
(Unaudited)
                 
    Q4 FY’07     FY’07  
Revenue reconciliation (in billions)
               
GAAP revenue range
  $ 1.24 - $1.27     $ 5.08 - $5.11  
 
               
Add back:
               
Fair value adjustment to Veritas deferred revenue (1)
  $ 0.01     $ 0.05  
 
 
           
Non-GAAP revenue range*
  $ 1.25 - $1.28     $ 5.13 - $5.16  
 
           
 
               
Earnings per share reconciliation
               
GAAP earnings per share range
  $ 0.04 - $0.06     $ 0.36 - $0.39  
 
Add back:
               
Stock-based compensation, net of tax (2)
  $ 0.03     $ 0.12  
Fair value adjustment to Veritas deferred revenue and amortization of acquired product rights and other intangible assets (1,3,4)
  $ 0.11     $ 0.44  
 
 
           
Non-GAAP earnings per share range*
  $ 0.18 - $0.20     $ 0.92 - $0.95  
 
           
 
*   We believe that providing a forecast of the non-GAAP items set forth above is useful to investors, and such items are used by our management, for the reasons associated with each of the adjusting items as described below.
 
(1)   Fair value adjustment to Veritas deferred revenue. We include revenue associated with Veritas deferred revenue that was excluded as a result of purchase accounting adjustments to fair value because we believe they are reflective of ongoing operating results.
 
(2)   Stock-based compensation, net of tax. Consists of expenses for employee stock options, restricted stock units, and employee stock purchase plan determined in accordance SFAS 123(R). We exclude these stock-based compensation expenses because they are non-cash expenses that we believe are not reflective of ongoing operating results. Further, we believe it is useful to investors to understand the impact of the application of SFAS 123(R) to our results of operations.
 
(3)   Amortization of acquired product rights and other intangible assets. The amounts recorded as amortization of acquired product rights and other intangible assets arise from prior acquisitions and are non-cash in nature. We exclude these expenses because we believe they are not reflective of ongoing operating results in the period incurred and not directly related to the operation of our business.
 
(4)   Fiscal 2007 also excludes amounts related to executive incentive bonuses, restructuring, and gain on sale of the Milpitas building, which net to an insignificant amount. We exclude these amounts because we believe they are not reflective of ongoing operating results in the period incurred and not directly related to the operation of our business.