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Symantec Reports Q4 And FY 2012 Results

Revenue grew 9% and reached a record $6.73 billion
Fourth Quarter 2012

- GAAP Revenue of $1.68 billion, flat compared to prior year

- Non-GAAP Operating Margin of 22.2%, down 190 basis points

- Non-GAAP Earnings Per Share of $0.38, equal to prior year

- GAAP Deferred Revenue of $3.97 billion, up 4%

- Cash Flow from Operations of $687 million, flat compared to prior year

Fiscal Year 2012

- GAAP Revenue of $6.73 billion, up 9%

- Non-GAAP Operating Margin of 25.2%, up 40 basis points

- Non-GAAP Earnings Per Share of $1.61, up 13%

- Cash Flow from Operations of $1.90 billion, up 6%

MOUNTAIN VIEW, Calif. – May 2, 2012 – Symantec Corp. (Nasdaq: SYMC) today reported the results of its fourth quarter and the fiscal year 2012, ended March 30, 2012. GAAP revenue for the fiscal fourth quarter was $1.68 billion, flat year-over-year and up 1 percent after adjusting for currency. For the fiscal year, GAAP revenue was $6.73 billion, up 9 percent year-over-year and up 6 percent after adjusting for currency.

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“We posted 9 percent growth for fiscal year 2012, driven by strength in our backup, Software-as-a- Service, data loss prevention, and managed security services offerings. In addition, we generated strong deferred revenue and cash flow, despite a weaker than expected fourth quarter,” said Enrique Salem, president and chief executive officer, Symantec. “We are encouraged as customers move towards cloud delivered services, and are excited about the roadmap we’ve developed for fiscal year 2013. We have many of the foundational elements in place to continue growing our business.”

“Year over year declines in license sales and a larger proportion of ratable subscription sales caused revenue and EPS to come in below our expectations for the fourth quarter. However, a greater amount of our billings went to the balance sheet, driving record deferred revenue,” said James Beer, executive vice president and chief financial officer, Symantec. “In fiscal year 2012, our business generated $1.9 billion of cash flow from operations, up 6 percent from fiscal year 2011, driven by record results for each of our key financial metrics and across all of our geographies.”

GAAP Results: GAAP operating margin for the fourth quarter of fiscal year 2012 was 11.4 percent compared with 14.3 percent for the same quarter last year. GAAP net income for the fiscal fourth quarter was $559 million compared with $168 million for the year-ago period. GAAP diluted earnings per share were $0.76, including the one-time impact from the sale of Symantec’s share of the Huawei-Symantec joint venture, compared with $0.22 for the year-ago quarter.

For the fiscal year 2012, GAAP operating margin was 16.0 percent compared with 14.2 percent for the same period last year. GAAP net income for the fiscal year 2012 was $1.17 billion. GAAP diluted earnings per share for the year were $1.57.

GAAP deferred revenue as of March 30, 2012, was $3.97 billion compared with $3.82 billion as of April 1, 2011, up 4 percent year-over-year and up 5 percent after adjusting for currency.

Cash flow from operating activities for the fourth quarter of fiscal year 2012 was $687 million compared with $689 million for the same quarter last year. Symantec ended the quarter and fiscal year with cash, cash equivalents and short-term investments of $3.21 billion. Cash flow from operating activities for fiscal year 2012 was $1.90 billion compared with $1.79 billion for fiscal year 2011, an increase of 6 percent.

Non-GAAP Results: Non-GAAP operating margin for the fourth quarter of fiscal year 2012 was 22.2 percent compared with 24.1 percent for the year-ago period. Non-GAAP net income for the fourth quarter was $283 million compared with $297 million for the year-ago quarter. Non-GAAP diluted earnings per share were $0.38 compared with earnings per share of $0.38 for the year ago quarter.

For the fiscal year 2012, non-GAAP operating margin was 25.2 percent compared with 24.8 percent for the same period last year. Non-GAAP net income for the year was $1.2 billion, compared to $1.1 billion for the prior year, an increase of 7%. Non-GAAP diluted earnings per share were $1.61, compared to $1.42, up 13% year over year.

During the fourth quarter of fiscal year 2012, Symantec repurchased approximately 12 million shares for $200 million at an average price of $17.88. During the fiscal year 2012, the company repurchased 51 million shares at an average price of $17.62, equivalent to $893 million. Symantec has $984 million remaining in the current board authorized stock repurchase program.

Business Segment and Geographic Highlights

For the quarter, Symantec’s Consumer segment represented 31 percent of total revenue and increased 2 percent year-over-year on an actual and currency-adjusted basis. The Security and Compliance segment represented 30 percent of total revenue and increased 8 percent year-over-year (9 percent after adjusting for currency). The Storage and Server Management segment represented 35 percent of total revenue and declined 6 percent year-over-year (down 5 percent after adjusting for currency). The Services segment represented 4 percent of total revenue and declined 6 percent year-over-year (down 5 percent after adjusting for currency).

International revenue represented 52 percent of total revenue in the fourth quarter of fiscal year 2012 and increased 4 percent year-over-year (5 percent after adjusting for currency). The Europe, Middle East and Africa region represented 27 percent of total revenue for the quarter and declined 5 percent year-over-year (down 1 percent after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 19 percent of total revenue and increased 15 percent year-over-year (13 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 54 percent of total revenue and declined 1 percent year-over-year on an actual and currency-adjusted basis.

Acquisition Highlights

For the quarter, Clearwell and LiveOffice combined to generate revenue of $17 million. The combined earnings per share dilution from these acquisitions was approximately $0.01.

For the fiscal year 2012, total revenue from the Clearwell and LiveOffice acquisitions was $54 million. The combined earnings per share dilution from these acquisitions was $0.01.

First Quarter Fiscal Year 2013 Guidance

Guidance assumes an exchange rate of $1.32 per Euro for the June 2012 quarter versus the actual weighted average of $1.44 and end of period rate of $1.45 per Euro.

For the first quarter of fiscal year 2013, ending June 29, 2012, revenue is estimated between $1.645 billion and $1.660 billion, compared to $1.653 billion in the year ago period, down 0.5 percent to up 0.5 percent as reported and up between 2.4 percent and 3.3 percent after adjusting for currency.

GAAP diluted earnings per share are estimated between $0.18 and $0.19 compared to $0.25, down between 24 percent and 27 percent as reported and down 16 percent to 20 percent after adjusting for currency. Non-GAAP diluted earnings per share are estimated between $0.37 and $0.38, compared to $0.40, down between 5 percent to 7.5 percent as reported, and down 1.5 percent to up 1.0 percent after adjusting for currency.

Deferred revenue is expected to be in the range of $3.715 billion and $3.735 billion, compared to $3.689 billion, up 0.7 percent to 1.3 percent as reported, and up between 2.8 percent and 3.4 percent after adjusting for currency.

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 2012, ended March 30, 2012, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. To listen to the live call, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software. A replay and script of our officers’ remarks will be available on the investor relations’ home page shortly after the call is completed.

About Symantec

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

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