Symantec Reports Record Revenue and Earnings in Fiscal Third Quarter;

Symantec Reports Record Revenue and Earnings in Fiscal Third Quarter; Large Enterprise Transactions and International Performance Drive Results

    Business Editors/High-Tech Writers

    CUPERTINO, Calif.--(BUSINESS WIRE)--Jan. 19, 2005--Symantec Corp. (Nasdaq:SYMC), the global leader in information security, today reported results for its fiscal third quarter ended Dec. 31, 2004. Symantec posted revenue for the quarter of $695 million, a 41 percent increase compared to $494 million for the same quarter last year, driven by strong performance in all business segments.
    GAAP Results: Net income for the fiscal third quarter was $164 million, compared to $111 million for the same quarter last year. Earnings per share was $0.22, a 38 percent increase compared to earnings per share of $0.16 for the year-ago quarter.
    Non-GAAP Results: Non-GAAP net income for the fiscal third quarter was $175 million, compared to $120 million for the same quarter last year. Non-GAAP earnings per share was $0.24, a 41 percent increase compared to earnings per share of $0.17 for the year-ago quarter. Non-GAAP results, as outlined in the attached consolidated statements and related reconciliation, exclude amortization of other intangibles from acquisitions, amortization of deferred stock-based compensation, acquired in-process research and development, restructuring charges, and patent settlement charges as well as related income tax benefits. See "Use of Non-GAAP Financial Information" below.
    "All business segments had strong double digit growth as customers continue to turn to Symantec to manage the integrity of their information assets," said John W. Thompson, Symantec chairman and CEO. "Solid online business, a record number of large enterprise transactions, both in size and number, and incredible international performance underpinned our success in the quarter."

    Revenue Components

    For the quarter, Symantec's worldwide enterprise business, including enterprise security, enterprise administration, and services, represented 48 percent of total revenue and grew 33 percent year-over-year. Symantec's enterprise security business represented 35 percent of total revenue and grew 29 percent; the enterprise administration business represented 11 percent of total revenue and grew 46 percent; and the services business represented 2 percent of total revenue and grew 37 percent. Symantec's consumer business represented 52 percent of total revenue and grew 49 percent.
    International revenues represented 54 percent of total revenue in the third quarter and grew 41 percent over the same quarter last year. The Americas, including the United States, Latin America, and Canada, represented 51 percent of total revenue and grew 39 percent. The Europe, Middle East and Africa region represented 35 percent of total revenue and grew 39 percent. Japan/Asia Pacific represented 14 percent of total revenue and grew 53 percent.

    Business Outlook

    Symantec is providing forward-looking guidance for the fiscal fourth quarter ending April 1, 2005, as follows:

--	Revenue is estimated between $690 million and $710 million.
--	At the mid-point of revenue guidance, GAAP earnings per share is estimated to be $0.23.
--	At the mid-point of revenue guidance, non-GAAP earnings per share is estimated to be $0.24.

    Symantec is raising forward-looking guidance for fiscal year 2005 ending April 1, 2005, as follows:

    -- Revenue is estimated to be $2.570 billion.

    -- Deferred revenue is expected to be approximately $1.35 billion
    based on the mid-point of fiscal fourth quarter revenue
    guidance.

    -- GAAP earnings per share is estimated at $0.80.

    -- Non-GAAP earnings per share is estimated at $0.86.

    Non-GAAP earnings per share guidance excludes the pre-tax amortization of other intangibles from acquisitions, amortization of deferred stock-based compensation, acquired in-process research and development and restructuring charges of approximately $14 million and $64 million for the fiscal quarter and year ending April 1, 2005, respectively.

    Quarterly Highlights

    -- During the quarter the total number of transactions worldwide
    worth more than $100,000 each was 410, including 122 worth
    more than $300,000 and 25 worth more than $1 million each.
    Overall, 132 more large enterprise transactions were generated
    compared to the year-ago quarter.

    -- Symantec signed new or extended agreements with customers
    including CIGNA, an employee benefits company; EarthLink, one
    of the nation's leading Internet service providers; SAS, the
    leader in business intelligence; AgriBank, FCB, a financial
    intermediary providing wholesale funds and services; APAC
    Customer Services, Inc., a leading provider of customer
    interaction solutions; HDR, an architectural, engineering, and
    consulting firm; Andrew Corporation, a global communications
    equipment and systems supplier; APL, a global container
    transportation company; Alcan, a global leader in aluminum and
    packaging, as well as aluminum recycling; Select Medical
    Corporation, a leading operator of specialty hospitals in the
    United States; Northeastern Regional Information Center
    (NERIC), a department of the New York Capital Regional Board
    of Cooperative Educational Services; Capital Health, Canada's
    largest integrated academic health region, providing complete
    health services to 1.6 million residents across central and
    northern Alberta; and West Virginia University.

    -- International customers from the quarter included Wipro, a
    leading IT solutions and services provider in application
    development, system integration, product implementation and
    consulting services; SOLVAY S.A., an international chemical
    and pharmaceutical group with headquarters in Brussels; Dexia
    Groupe, the second largest financial group in Belgium;
    Belgacom, the leading Internet service provider and operator
    in Belgium; Ballast Nedam, one of the largest construction
    companies in The Netherlands; Swift, a financial
    industry-owned co-operative supplying secure, standardized
    messaging services and interface software; Telstra,
    Australia's leading telecommunications and information
    services company; GLOBO.COM, the leading video and broadband
    provider in Brazil; and HypoVereinsbank AG, the second largest
    quoted bank in Germany.

    Conference Call

    Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss fiscal third quarter 2005 results, and to review guidance for the fiscal fourth quarter and fiscal year 2005. 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.

    About Symantec

    Symantec is the global leader in information security providing a broad range of software, appliances and services designed to help individuals, small and mid-sized businesses, and large enterprises secure and manage their IT infrastructure. Symantec's Norton brand of products is the worldwide leader in consumer security and problem-solving solutions. Headquartered in Cupertino, Calif., Symantec has operations in more than 35 countries. More information is available at http://www.symantec.com.

    Note to Editors: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Center at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States.

    Symantec and the Symantec logo are trademarks or registered trademarks, in the United States and certain other countries, of Symantec Corporation. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully acknowledged.

    Forward Looking Statements: This press release contains forward-looking statements, including forecasts of future revenue, deferred revenue and GAAP and non-GAAP earnings per share, expected industry patterns, and other financial and business results that involve 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 by this press release. Such risk factors include, among others: the sustainability of recent growth rates, particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security; the positioning of Symantec's products in those segments; the competitive environment in the software industry; general market conditions; fluctuations in currency exchange rates; changes to operating systems and product strategy by vendors of operating systems; and whether Symantec can successfully develop new products and integrate 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 sections of Symantec's recently filed Form 10-Q. Symantec assumes no obligation to update any forward-looking information contained in this press release.

    Use of Non-GAAP Financial Information: In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-GAAP financial results. Non-GAAP net income and earnings per share exclude acquisition related charges, such as amortization of other intangibles, amortization of deferred stock-based compensation and in-process research and development, and certain other identified charges, such as restructuring and patent settlement, as well as the tax effect of these items. Symantec's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method Symantec uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can also be found on the investor relations Web site at www.symantec.com/invest/center.html.

    Additional Information and Where to Find It

    Symantec Corporation and VERITAS Software Corporation intend to file a registration statement on Form S-4 containing a joint proxy statement/prospectus in connection with the merger transaction involving Symantec and VERITAS Software. Investors and security holders are urged to read this filing when it becomes available because it will contain important information about the merger transaction. Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the SEC at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Symantec by contacting Symantec Investor Relations at 408-517-8239. Investors and security holders may obtain free copies of the documents filed with the SEC by VERITAS Software by contacting VERITAS Software Investor Relations at 650-527-4523.
    Symantec, VERITAS Software and their directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Symantec and VERITAS Software in connection with the merger transaction. Information regarding the special interests of these directors and executive officers in the merger transaction will be included in the joint proxy statement/prospectus of Symantec and VERITAS Software described above. Additional information regarding the directors and executive officers of Symantec is also included in Symantec's proxy statement for its 2004 Annual Meeting of Stockholders, which was filed with the SEC on July 30, 2004. Additional information regarding the directors and executive officers of VERITAS Software is also included in VERITAS Software's proxy statement for its 2004 Annual Meeting of Stockholders, which was filed with the SEC on July 21, 2004. These documents are available free of charge at the SEC's web site at www.sec.gov and from Investor Relations at Symantec and VERITAS Software as described above.

SYMANTEC CORPORATION

GAAP Consolidated Statements of Income

Three Months Ended Nine Months Ended December 31, December 31, ------------------- --------------------- (In thousands, except per share data; unaudited) 2004 2003 2004 2003 ----------------------- --------- --------- --------- --------- Net revenues $695,224 $493,905 $1,870,171 $1,313,694 Cost of revenues 121,498 87,608 330,978 229,996 --------- --------- --------- ---------

Gross profit 573,726 406,297 1,539,193 1,083,698

Operating expenses: Research and development 85,289 61,885 241,989 182,086 Sales and marketing 226,577 167,014 616,395 464,556 General and administrative 29,910 21,712 81,773 69,258 Amortization of other intangibles from acquisitions 1,622 628 3,656 2,175 Amortization of deferred stock-based compensation 1,041 -- 1,680 -- Acquired in-process research and development 1,218 1,600 3,480 2,600 Restructuring, site closures and other -- (126) 2,776 444 Patent settlement -- -- -- 13,917 --------- --------- --------- ---------

Total operating expenses 345,657 252,713 951,749 735,036

Operating income 228,069 153,584 587,444 348,662

Interest income 13,340 9,184 33,516 28,088 Interest expense (1,741) (5,291) (12,323) (15,873) Income, net of expense, from sale of technologies and product lines -- 5,215 -- 9,541 Other income, net 14 618 999 580 --------- --------- --------- ---------

Income before income taxes 239,682 163,310 609,636 370,998 Provision for income taxes 76,105 51,834 193,159 117,308 --------- --------- --------- ---------

Net income $163,577 $111,476 $ 416,477 $ 253,690 ========= ========= ========= ========= Net income per share - diluted(a) $ 0.22 $ 0.16 $ 0.58 $ 0.37 ========= ========= ========= =========

Shares used to compute net income per share - diluted(a) 742,446 724,358 738,053 713,534 ========= ========= ========= =========

(a) Share and per share amounts for the three and nine months ended December 31, 2003 retroactively reflect the two-for-one stock split effected as a stock dividend, which occurred on November 19, 2004. For the three and nine months ended December 31, 2004 and 2003, diluted net income per share is calculated using the if-converted method. Under this method, the numerator excludes the interest expense from the 3% convertible subordinated notes, net of income tax, of $1.2 million and $3.6 million for the three months ended December 31, 2004 and 2003, respectively, and $8.4 million and $10.8 million for the nine months ended December 31, 2004 and 2003, respectively, and the denominator includes shares issuable from the assumed conversion of the 3% convertible subordinated notes.

SYMANTEC CORPORATION

Non-GAAP Consolidated Statements of Income

Non-GAAP amounts exclude all acquisition related amortization of intangibles and amortization of deferred stock-based compensation, acquired IPR&D, patent settlement and restructuring charges.

Three Months Ended Nine Months Ended December 31, December 31, (In thousands, except per share data; unaudited) 2004 2003 2004 2003 ------------------------- -------- -------- ---------- ---------- Net revenues $695,224 $493,905 $1,870,171 $1,313,694 Cost of revenues 108,163 77,030 293,189 200,413 -------- -------- ---------- ---------- Gross profit 587,061 416,875 1,576,982 1,113,281 Operating expenses: Research and development 85,289 61,885 241,989 182,086 Sales and marketing 226,577 167,014 616,395 464,556 General and administrative 29,910 21,712 81,773 69,258 -------- -------- ---------- ----------

Total operating expenses 341,776 250,611 940,157 715,900

Operating income 245,285 166,264 636,825 397,381 Interest income 13,340 9,184 33,516 28,088 Interest expense (1,741) (5,291) (12,323) (15,873) Income, net of expense, from sale of technologies and product lines -- 5,215 -- 9,541 Other income, net 14 618 999 580 -------- -------- ---------- ---------- Income before income taxes 256,898 175,990 659,017 419,717 Provision for income taxes 82,207 56,317 210,885 134,309 -------- -------- ---------- ---------- Net income $174,691 $119,673 $ 448,132 $ 285,408 ======== ======== ========== ========== Net income per share - diluted(b) $ 0.24 $ 0.17 $ 0.62 $ 0.42 ======== ======== ========== ========== Shares used to compute net income per share - diluted(b) 742,446 724,358 738,053 713,534 ======== ======== ========== ==========

(b) Share and per share amounts for the three and nine months ended December 31, 2003 retroactively reflect the two-for-one stock split effected as a stock dividend, which occurred on November 19, 2004. For the three and nine months ended December 31, 2004 and 2003, diluted net income per share is calculated using the if-converted method. Under this method, the numerator excludes the interest expense from the 3% convertible subordinated notes, net of income tax, of $1.2 million and $3.6 million for the three months ended December 31, 2004 and 2003, respectively, and $8.4 million and $10.8 million for the nine months ended December 31, 2004 and 2003, respectively, and the denominator includes shares issuable from the assumed conversion of the 3% convertible subordinated notes.

SYMANTEC CORPORATION

Reconciliation of Non-GAAP Gross Profit, Operating Expenses and Consolidated Statements of Income to the GAAP Gross Profit, Operating Expenses and Consolidated Statements of Income

Three Months Ended Nine Months Ended December 31, December 31, (In thousands, except per share data; unaudited) 2004 2003 2004 2003 ------------------------- --------- -------- ---------- ---------- Non-GAAP gross profit $ 587,061 $416,875 $1,576,982 $1,113,281

Cost of revenues: Amortization of acquired product rights (13,335) (10,578) (37,789) (29,583) --------- -------- ---------- ---------- GAAP gross profit $ 573,726 $406,297 $1,539,193 $1,083,698 ========= ======== ========== ==========

Non-GAAP operating expenses $ 341,776 $250,611 $ 940,157 $ 715,900

Operating expenses: Amortization of other intangibles from acquisitions 1,622 628 3,656 2,175 Amortization of deferred stock- based compensation 1,041 -- 1,680 -- Acquired in-process research and development 1,218 1,600 3,480 2,600 Restructuring, site closures and other -- (126) 2,776 444 Patent settlement -- -- -- 13,917 -------- -------- ---------- ---------- Total operating expenses 3,881 2,102 11,592 19,136 GAAP operating expenses $ 345,657 $252,713 $ 951,749 $ 735,036 ========= ======== ========== ==========

Non-GAAP net income $ 174,691 $119,673 $ 448,132 $ 285,408

Cost of revenues (13,335) (10,578) (37,789) (29,583) Operating expenses (3,881) (2,102) (11,592) (19,136)

Income tax benefit 6,102 4,483 17,726 17,001 -------- -------- ---------- ---------- GAAP net income $ 163,577 $111,476 $ 416,477 $ 253,690 ========= ======== ========== ========== Non-GAAP and GAAP net income per share - diluted Non-GAAP net income per share - diluted $ 0.24 $ 0.17 $ 0.62 $ 0.42 ========= ======== ========== ========== GAAP net income per share - diluted $ 0.22 $ 0.16 $ 0.58 $ 0.37 ========= ======== ========== ========== Shares used to compute net income per share - diluted 742,446 724,358 738,053 713,534 ========= ======== ========== ==========

SYMANTEC CORPORATION

Consolidated Balance Sheets December 31, March 31, (In thousands; unaudited) 2004 2004 --------------------------------------- ------------ ----------

ASSETS ------

Current assets: Cash and cash equivalents $2,944,002 $2,410,331 Trade accounts receivable, net 324,488 259,152 Inventories 21,884 15,134 Current deferred income taxes 141,105 98,438 Other current assets 65,801 59,079 ------------ ----------

Total current assets 3,497,280 2,842,134

Property and equipment, net 386,092 378,367 Acquired product rights, net 138,014 120,938 Goodwill 1,386,851 1,080,759 Other long-term assets 48,904 34,300 ------------ ----------

$5,457,141 $4,456,498 ============ ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------

Current liabilities: Accounts payable $ 82,874 $ 71,654 Accrued compensation and benefits 116,214 116,770 Current deferred revenue 1,181,350 878,716 Other accrued expenses 88,068 92,595 Income taxes payable 190,132 127,305 ------------ ----------

Total current liabilities 1,658,638 1,287,040

Convertible subordinated notes -- 599,987 Long-term deferred revenue 112,623 92,481 Long-term deferred tax liabilities 53,014 44,750 Other long-term obligations 5,153 6,032

Stockholders' equity: Common stock 7,078 3,119 Capital in excess of par value 2,372,144 1,573,466 Accumulated other comprehensive income 256,247 125,484 Deferred stock-based compensation (10,878) -- Retained earnings 1,003,122 724,139 ------------ ----------

Total stockholders' equity 3,627,713 2,426,208 ------------ ----------

$5,457,141 $4,456,498 ============ ==========

--30--KC/sf*

CONTACT: Symantec Corporation Melissa Martin, 408-517-8475 (Media) Melissa_martin@symantec.com Helyn Corcos, 408-517-8324 (Investors) Hcorcos@symantec.com

KEYWORD: CALIFORNIA INDUSTRY KEYWORD: HARDWARE SOFTWARE NETWORKING EARNINGS CONFERENCE CALLS SOURCE: Symantec Corporation

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