Veritas Revenue Statement

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1 INTRODUCTION Helyn Corcos, Vice President, Investor Relations, Symantec Good afternoon and thank you for joining us. With me today are John Thompson, Chairman of the Board and CEO of Symantec, Gary Bloom, vice-chairman and President of Symantec, and Greg Myers, Senior Vice President of Finance and CFO. Today s call is structured in a slightly different format from prior earnings calls. Greg will begin by discussing financial results for Symantec s fiscal first quarter 2006, which ended July 1, 2005 and will provide limited financial detail on VERITAS June 2005 quarter. Next, Gary will provide additional comments on VERITAS results. Then, John will discuss highlights of Symantec s performance. Finally, Greg will review methodology that will be used to present combined historical financial information going forward and will provide an update to Symantec s guidance for fiscal year 2006, and the September 2005 quarter. We will then open up the call for questions. Today s call is being recorded and will be available for replay on Symantec s investor relations home page at symantec.com/invest. In addition to today s press release, a copy of our prepared remarks and supplemental financial information is also available on the IR website. I also want to note that as Greg is providing the guidance update, additional supplemental information will be posted to our investor relations homepage to assist you in following along with this discussion. Before we begin, I would like to remind everyone that some of the information discussed on this call, particularly our revenue and operating model targets for the coming quarter and fiscal year, contain forward-looking statements that involve risks and uncertainty. These statements are based on current expectations. Actual results may differ materially from those set forth in such statements. Additional information concerning factors that may cause actual results to differ can be found in the company s filings with the U.S. Securities and Exchange Commission. Deleted: s In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-gaap financial results. Investors are encouraged to review the reconciliation of these non-gaap financial measures to the comparable GAAP results, which can be found in the press release and on the IR website. And now, it s my pleasure to introduce our CFO, Greg Myers. FINANCIAL RESULTS Greg Myers, Sr. Vice President and CFO, Symantec Thanks Helyn. Good afternoon everyone and thank you for joining us for today s earnings release. I am very pleased to provide you with Symantec s financial details for the June quarter, the first quarter of our fiscal year Revenue for our June 2005 quarter was $700 million, up 26% from last year s revenue of $557 million. 1

2 GAAP earnings per share of $0.27 for the quarter was 69% higher than last June s GAAP earnings per share of $0.16. Non-GAAP earnings per share for the quarter was $0.27, 50% higher than the June 2004 quarter s non-gaap earnings per share of $0.18. Our non-gaap earnings per share excluded charges of $299 thousand, due to a $20 million benefit related to a change in the tax rules associated with the American Jobs Creation Act, partly offset by the amortization of acquisition related intangibles, In-Process-Research-and-Development costs, the amortization of deferred compensation, restructuring charges, and integration expenses associated with our announced acquisition of VERITAS which was completed on July 2 nd, the first day of our September 2005 quarter. Revenue by segment for the June 2005 quarter were as follows: Consumer revenue was $357 million and grew 28% over the June 2004 quarter. It should be noted that June has historically been a seasonally slow period in our consumer markets and this quarter played out very close to our expectations. Our electronic distribution channels continued to be our fastest growing channel, growing 47% over last June. Our traditional retail channel was up 11% from last year as the seasonal summer slowdown took effect in the brick-and-mortar channel. Enterprise revenue totaled $343 million, 23% over the June 2004 quarter. Revenue by segment is as follows: Enterprise security revenue for the June 2005 quarter was $266 million and grew 26% over the June 2004 quarter. It should be noted that this segment now includes our Managed Security Services (MSS) business. Enterprise Administration revenue was $67 million and grew 10% over the June 2004 quarter. Within this segment, remote access (pcanywhere) was within expectations, declining 17% from last year. The balance of the segment grew 27%. Services revenue, which is comprised of consulting and education, was $10 million for the quarter, up 85% over the June quarter last year. International revenues were $354 million, grew 27% and accounted for 51% of this quarter s revenue. U.S. revenues for the quarter were $346 million and grew 25%. The revenue impact from currency on the June quarter, as compared to our March 2005 quarter, was a negative $12 million as the Euro fell about 6% from April 1 st to July 1 st. In addition, the drop in the Euro effected our balance sheet positions, where currency had a negative effect on cash of $71 million and on deferred revenue of $43 million. The effect from currency on revenue as compared to the June 2004 quarter was a favorable $12 million. This added 2 points of growth to the June 2005 quarter. In addition, net income for the 2

3 quarter, as compared to the June 2004 quarter, was $6 million higher due to the effects from currency. Non-GAAP gross margin was 84.9% for the June 2005 quarter, comparing well to the 84% we posted last June. Lower sell-in, resulting from the seasonal nature of the quarter, and lower OEM royalty payments were the most notable contributors to the margin improvement. Non-GAAP operating expenses of $333 million were 48% of revenue for the June 2005 quarter. This compared favorably to the June 2004 quarter where expenses of $285 million were 51% of revenue. The notable improvement in our expense ratio is mostly due to headcount related expenses. Headcount at the end of the June quarter was at 6,540 employees, 955 employees and 17% higher than the June 04 quarter. Excluding employees from acquisitions for the past 12 months headcount grew 14%. Non-GAAP net income was $199 million for the quarter. This was 55% higher than the June 2004 quarter s non-gaap net income of $128 million. Symantec s balance sheet continued to be very well positioned as we exited the June quarter. Cash and short-term investments of $3,351 million comprised 59% of total assets and were $145 million higher than the March 2005 quarter. Cash from operating activities in the quarter was $211 million. The company s net accounts receivable balance at the end of the June 2005 quarter was $241 million, $9 million lower than last June. Days Sales Outstanding were 31 days as we exited the June 2005 quarter versus 40 days at the end of the June 2004 quarter. Deferred revenue at the end of the June 2005 quarter was $1,268 million, up $204 million or 19% from last June. This quarter s deferred revenue balance was affected negatively by $43 million from the strengthening of the U.S. dollar during the quarter as well as an expected slowdown in sell-through as we entered the summer season. VERITAS RESULTS: VERITAS revenue was $529 million for the June quarter, 9% higher than their June 2004 quarter. June quarter non-gaap cost of sales and operating expenses, excluding $37 million of amortization of acquisition related intangibles and deferred compensation and merger related expenses, were $407 million and 77% of revenue. This compared with $356 million and 73% last June. The VERITAS balance sheet was in a strong position at the end of June. Cash was $2,945 million, up $523 million from the March 2005 quarter. The cash balance included the proceeds 3

4 from a $497 million short-term international loan that was incurred to facilitate their cash repatriation under the American Jobs Creation Act. This loan was paid off in early July. Accounts receivable for VERITAS was at $252 million. DSO was at 45 days versus 32 days last June. Changes in linearity, where a higher percentage of their sales are occurring later in the quarter was the most notable change driving the increase in DSO. Deferred revenue at the end of the June quarter was $521 million. This is 23% higher than last June. As the VERITAS accounts are merged with Symantec we would expect 65-70% of the balance would be lost through purchase accounting for the transaction. The balance of 30-35% would be recognized as revenue over time. Most of the lost deferred revenue will be replenished within 12 to 15 months. I ll now turn the call over to Gary Bloom to give additional detail on the VERITAS results. VERITAS Color Gary Bloom, Vice Chairman and President, Symantec Thanks Greg. I am very pleased with the VERITAS team s success in balancing merger related activities with solid June quarter execution. Total revenue for the quarter was $529 million and aligns our revenue results with our plan for the first half of the year. Both license and service revenue posted positive growth in the quarter. License revenue benefited from healthy large deal activity demonstrating both strong demand for our solutions and our customers comfort with the merger. On a worldwide basis, our sales team generated 253 deals greater than $100,000 and 19 deals greater than $1 million. Service revenue continues to deliver a predictable revenue stream driven by an increasing installed base, healthy maintenance renewals, and growth in our training and consulting business. As has been the case for several quarters, our geographic expansion strategy continues to deliver results with the EMEA region growing 22% and Asia Pacific Japan growing 56% year-overyear. While results in the US were sluggish with a 3% decline, we experienced great momentum with our market leading KVS Enterprise Vault products. We are optimistic that the sales leadership changes announced in conjunction with the merger will help to improve our execution and performance in the region. Our channel performed very well this quarter with our two-tier distribution channel delivering a record revenue quarter driven by strength in Backup Exec product sales. This product line is enjoying very good momentum in the market helping both our success and that of our channel partners. And now, I d like to provide a few highlights within our product segments. Our data availability and archiving products enjoyed healthy results. With Netbackup 6.0 planned for delivery in the early part of the December quarter, we are well positioned to further 4

5 our leadership position at the high end of the enterprise. Our continued innovation, investments and vision in the data protection space are keeping us well positioned in this market and we are happy with the activity level of competitive replacements in enterprise shops. Our activity in this market is supported by our leadership position in Gartner Group s most recently published Magic Quadrant for the enterprise backup/recovery software market. We are not only the leader, but we improved our position relative to our largest competitors. Enterprise Vault continued to gain traction around the world with Asia Pacific seeing its largest archive deal ever. In early July, we began shipping Enterprise Vault 6.0, providing a comprehensive records retention and management platform. Our Database Editions posted strong growth and delivered its second best revenue quarter, which is consistent with our plan to migrate customers to higher value bundles within our storage management business. While our overall Storage Management business experienced continued weakness, our planned introduction of Storage Foundation 4.1 in the September quarter should drive improvement in this part of our business. Utility Computing Infrastructure continues to execute very well with solid demand for High Availability bundles, OpForce and CommandCentral Suite. Consistent with other suppliers in the market, our APM products were weak in the quarter after several record quarters. Furthering our platform expansion, VERITAS signed a partnership agreement during the quarter with IBM to resell VERITAS Cluster Server and Storage Foundation products for IBM s eserver xseries and BladeCenter servers. In addition, we expanded our support for AMD Opteron processors with product offerings of Storage Foundation, OpForce, NetBackup, and Backup Exec for Windows. In summary, the VERITAS team delivered strong results in the June quarter as our strong brand, market leadership and competitive advantages in key product segments continued to strengthen. The merger further heightens our value proposition to our customers and our integration planning seems to have paid off with the first 3 weeks of combined operations going very well. I would now like to turn the call over to John. Symantec Color John Thompson, Chairman and CEO, Symantec Thanks Gary. Our team s fiscal first quarter performance was a continuation of the well-established trends of revenue growth, solid profitability and strong cash generation. These results underpin the focus we always have on execution and demonstrate our resolve to not become distracted by mergerrelated activities. Over the past four quarters, the malicious threat environment has evolved to more targeted attacks focused at stealing valuable personal information. As the threat landscape continues to advance, lesser known threats like, pharming, phishing, fraud and identity theft are forcing 5

6 users to take additional steps to safeguard their computers and, most importantly, their personal information. We believe these new types of threats will require a more vigilant focus on innovation and more rapid introduction of new features and functions to address the changing landscape. Furthermore, we believe Symantec is uniquely positioned to protect our customers from these new threats given the broad range of threat protection and availability capabilities we have in our portfolio. During the June quarter, all of our geographic regions posted 20% or better revenue growth. EMEA had the strongest growth at 28%, even in the face of a strengthening dollar impacting results. We were very pleased with the performance of the global enterprise group. They delivered another solid quarter of execution as revenue grew 23% over the June 2004 quarter. Breaking it down, we saw 26% year-over-year growth in our enterprise security segment, 85% year-over-year growth in our services segment, and our Enterprise Administration business group posted 10% year-over-year growth. On a worldwide basis the total number of transactions valued at more than $100,000 reached 274, including 15 deals worth more than 1 million dollars. This represents 22% growth in large deals compared to the June quarter last year. In addition, 53% of these transactions included multiple Symantec products or services as the transactions continue to be driven by the depth and breadth of our product and services offerings. Our enterprise antivirus revenues grew almost 20% vs. June 2004, inline with expectations. We continue to benefit from our ability to penetrate customer opportunities around the world with a very strong set of offerings. Our gateway appliance sales were boosted by contributions from the Symantec Gateway Security 5400 Series and the Symantec Network Security 7100 Series of intrusion prevention appliances. During the quarter, we displace an incumbent vendor and signed a multi-million dollar, multiyear deal for the 7100 IPS appliances bundled with managed security services. The customer was a global insurance company seeking a solution to make their systems easier to manage and audit in order to meet Sarbanes-Oxley requirements. This quarter we are excited about the launch of our 3rd generation appliance our Symantec Gateway Security 5600 Series. This new series includes several new features such as enhanced antispam and content filtering. We also believe it will be the first security appliance to fully integrate both IPSEC and SSL VPN technology. One year after our acquisition of Brightmail, our secure and antispam business continues it s strong momentum, growing 33% sequentially. 6

7 Our Brightmail solution has established itself as the secure leader with a very strong customer base of ISPs and large enterprises. While these segments continue to perform very well, we are also seeing strength in the SMB market where the reach of our channel partners is allowing us to capture new buyers. Our ability to offer customers a choice of solutions ranging from software, appliances, or a hosted service, continues to position us very well in the secure mail market segment. In a recent Gartner Magic Quadrant report, Symantec s security solutions were positioned as providing the best vision in the industry, in addition to executing far beyond any other competitor. We continue to believe security is not just about antivirus or antispam, but a host of tightly integrated capabilities. Just last month, we launched a new product that defends against day-zero attacks and maintains system compliance on clients and servers. The innovative Symantec Critical System Protection solution integrates recently acquired technologies and utilizes behavior-based security policies. When deployed with our enterprise antivirus capabilities, this product safeguards applications and operating systems from new and unknown threats. The Enterprise Administration segment performed in line with expectations during the June quarter, posting revenue of $67 million and year-over-year growth of 10%. As Greg mentioned, this business would have grown 27% if you exclude pcanyware, which continued to decline as expected. Security concerns, ever-changing compliance requirements and strong ROI are top concerns for today s IT leaders. Symantec s focus is to address the overall complexity of managing their environments, while delivering a rapid return. The latest addition to the LiveState family is the LiveState Client Management Suite, which is a comprehensive configuration and lifecycle management solution for highly distributed and heterogeneous environments. This is a critical component of our Information Integrity initiative and will help organizations build a more resilient infrastructure by taking a holistic view to security, systems and storage management. Overall our enterprise business continues to build momentum. Now let s take a look at our consumer performance. The consumer business grew 28% versus the June quarter a year ago and generated revenue of $357 million. As expected, our consumer performance returned to a more normal pattern as we experienced prior to the high-profile threat environment of the last three years. The electronic distribution channels continue to be an area of tremendous success for our team. OEM, online and subscription renewal channels posted revenue of $204 million, and grew 47% versus the same period last year. However, some weakness in retail execution, particularly in a few countries in the EMEA region, coupled with the impact of a strengthening dollar, affected the overall consumer results. 7

8 During the quarter, we released Norton Internet Security - AntiSpyware Edition to the marketplace. The delivery of this comprehensive, real-time solution addresses the changing security needs of consumers by providing detection and automatic removal of spyware and adware from users computers and preventing new spyware risks from impacting the PC in the future. As is typical for us in the September quarter, we will refresh our Norton line of consumer products. These products will offer exciting new features, which will provide stronger security and more personalized protection. In light of the constantly changing requirements for security solutions for consumers, our 2006 releases will offer our customers not only the updates for virus definitions and attack signatures, but we will also provide new product functions that will be delivered throughout the year. By doing so, we enhance the products competitiveness on a continual basis, versus our current once a year upgrade cycle. In addition, this better positions our company in the changing competitive environment. The result of this change will move the consumer business to a fully ratable revenue recognition model. On the merger front, following the close of the transaction, we launched an outreach program to over 450 top accounts to make introductions and begin discussions about the new Symantec. Feedback has been uniformly positive and has set the stage for our team to continue to make progress with large enterprise buyers. We believe the combination better positions us to help customers build a resilient infrastructure, manage a complex heterogeneous environment, and reduce overall IT risk. In addition, bringing our market leading capabilities together improves our ability to continuously optimize performance and help companies bounce back from disruptions when they occur. The combined team is now focused on innovation and execution. In closing, I m excited about the prospects for the new Symantec. We continue to find ways to make our business more competitive. And, we continue to assess our portfolio with an eye toward optimizing revenue and earnings growth. The combined company will offer customers one of the broadest portfolios of leading software and solutions, on the most complete set of operating platforms, and across all tiers of the infrastructure. Before I turn the call over to Greg to review our guidance for the September quarter and the full year, I d like to put some context around our view. Since our initial forecast in December, a number of important changes have occurred. Most notably, a significant change in the dollar reflecting nearly a 6% decline from our plan assumption, an announced plan to repurchase $3 billion of stock, and a change in the structure of our consumer business to enable accelerated delivery of our newest innovations to our 8

9 customers. The consumer model change sets up the eventual move to software as a service, thereby offering consumers and small business users greater convenience in the buying process. All of these changes are reflected in our new outlook, which represents our best view of the changing environment. Most importantly, they are a reflection of the realities of today s competitive market. And now, I d like to hand it back to Greg to provide details on our guidance for the September quarter and fiscal year GUIDANCE Greg Myers, Sr. Vice President and CFO, Symantec Thanks John. Before I begin the guidance discussion, I d like to remind everyone that we ve posted additional supplemental information on the IR homepage to assist you in following along with this discussion. As we begin to develop our historical and projected financial views for fiscal year 2006 and our September quarter, including the VERITAS operations, it will be important for all of us to understand how the data will be displayed. As such the following will be the basis for all comparative data: Prior to the merger all historical pro-forma information will combine each Symantec fiscal period with the corresponding VERITAS fiscal period. Some examples of this convention are as follows: Symantec s fiscal fourth quarter of 2005, which was the March 2005 quarter, would be consolidated with VERITAS fiscal fourth quarter, which was their December 2004 quarter. Another example would be Symantec s fiscal first quarter of 2006, the June 2005 quarter, would be combined with the VERITAS fiscal first quarter, which was their March 2005 quarter. Our current fiscal year ending March of 2006 will include consolidated quarterly results for Symantec and VERITAS for the fiscal quarters ending September 2005, December 2005 and March The June quarter will be presented in a pro-forma format that includes Symantec s June 2005 results, our fiscal first quarter, with the VERITAS March 2005 result, which was their first fiscal quarter. These results will be compared to a consolidated view of fiscal 2005 that will include Symantec s fiscal year ended in March of 2005 and VERITAS fiscal year ended December We will continue to report both GAAP and non-gaap results. Non-GAAP results will exclude the amortization of acquisition related intangibles, IPR&D costs, the amortization of deferred compensation, and restructuring charges. In addition, we will continue to exclude other unusual expenses. Our GAAP results are required to exclude a portion of VERITAS deferred revenue. Our non- GAAP results will include all of VERITAS deferred revenue. The company feels this non- GAAP measure will assist investors by allowing for a growth measurement that ties into prior year revenues in a more comparable way. In addition, the allocation of the purchase price across its various elements, such as tangible assets, IPR&D, developed software, goodwill and other intangibles, are estimates in this forecast. 9

10 The allocation of the purchase price will not be finalized for a few more months. After we finalize the purchase price allocations we will update our forecast for our next earnings call. In every case the company will continue to provide reconciliation between GAAP and non- GAAP results to assist the reader s comprehension of our financials. Finally it should be noted that there are numerous risks as we bring these two large entities together. Investors should continue to review 10Q s and 10K s for the risk factors associated with our business and with the VERITAS business prior to the acquisition. In addition we need to be clear that there is always risk in integration. Although we feel we are seasoned at managing M&A integrations this combination is clearly the largest acquisition Symantec has ever been involved in and this activity does present the complexities associated with scale. Last December when we announced our merger with VERITAS we provided the following guidance: First, $5.3 billion in non-gaap revenue before an estimated purchase accounting adjustment of $300 million for VERITAS deferred revenue. $5.0 billion of GAAP revenue. Secondly, we estimated $0.99 of non-gaap earnings on the $5.3 billion of forecasted non- GAAP revenue. The company s current non-gaap revenue guidance is at $5.131 billion. The delta of approximately $200 million from our original estimate of $5.3 billion is driven by two changes. First, our original revenue forecast was based on $1.28/Euro. Our current forecast is at $1.21/Euro due to the strength of the U.S. dollar over the past three months. This will result in a $115 million decline in revenue as compared to our original forecast. Secondly, with the launch of our 2006 consumer products in September various technology and product enhancements will be made available to customers at the company s discretion during the term of their license. Because of this change in our delivery model consumer revenues will need to be recognized on a pro-rata basis over the term of the license. This will result in a $92 million reduction in revenue from our original estimates last December. It should be noted that $79 million of this revenue reduction is expected to occur over the next two quarters. Moving to EPS, last December we estimated non-gaap EPS of $0.99 on the $5.3 billion of non-gaap revenue. Our going forward guidance remains at $0.99 given that there have been a number of ins-and-outs over the course of the past seven months. The most notable differences in the composition of our forecasted non-gaap EPS is as follows: The earnings effect on the change in foreign exchange from our original estimate of $1.28/Euro to $1.21/Euro is a $0.06 decline. 10

11 The change in our consumer offering will dictate ratable revenue recognition. This will result in a $0.03 decline in EPS. Our operating tax rate going forward is estimated at 31% versus the prior forecast of 32%. This will result in a $0.01 increase in earnings. The companies announced repurchase activity; net of lost interest income is expected to be $0.05 accretive to EPS. Finally we expect a $0.03 increase in earnings from other non-operating and operating activities, most of which is from higher interest income due to an improvement in the yields on our invested cash assets. With these noted changes from our original guidance last December our current GAAP and non- GAAP guidance is as follows: For the fiscal year ending March 31, 2006 our GAAP revenue is forecasted at $4,852 million, excluding $279 million of deferred revenue from the VERITAS transaction. Our Non-GAAP revenue projection is forecasted at $5,131 million, including all of the VERITAS deferred revenue. The forecasted non-gaap revenue is 11% higher than the fiscal year 2005 pro-forma revenue of $4,625 million. For the September 2005 quarter GAAP revenue is estimated at $1,051 million, excluding $129 million of deferred revenue from the VERITAS transaction. Non-GAAP revenue is forecasted at $1,180 million, including all of the VERITAS deferred revenue. Non-GAAP revenue is about $50 million below our June 2005 stand-alone revenue of $700 million for SYMC and $529 million for VRTS. This change is tied to a $40 million reduction in Symantec s consumer revenue as we implement the new 2006 products under a pro-rata revenue recognition model. The remaining reduction of $9 million is related primarily to the sequential foreign exchange effect due to a stronger dollar. Non-GAAP gross margin is forecasted at 83.9% for fiscal year The September 2005 quarter is forecasted at 83.4%. Non-GAAP operating expenses are forecasted at $2,790 million for fiscal year 2006 with the September 2005 quarter forecasted at $680 million. Operating Income on a non-gaap basis is estimated at $1,517 million, 29.6% of non-gaap revenue. For the September 2005 quarter non-gaap operating income is forecasted at $304 million, 25.8% of non-gaap revenue. Forecasted interest income has been lowered by $45 million in anticipation of the announced $3 billion stock repurchase. The company expects to begin the repurchase in early August. We would anticipate the completion of the repurchase by the end of December. 11

12 GAAP net income for fiscal year 2006 projected at $540 million. The September 2005 quarter is forecasted at a GAAP loss of $100 million. It should be noted that the forecasted fiscal year 2006 GAAP income and the September 2005 quarter loss include purchase price allocation estimates that could vary significantly from the actual allocation of the purchase price that will be booked as part or our September results. Notable items in the purchase price allocation are IPR&D, developed software, deferred compensation and other intangibles. Based on the forecasted GAAP income GAAP EPS is estimated at $0.47 for fiscal year The company expects a GAAP loss per share in the September 2005 quarter of $0.08. Non-GAAP net income is forecasted at $1,139 million for fiscal year 2006 and $239 million for the September 2005 quarter. Our non-gaap results exclude all merger related costs, restructuring charges settlement charges, and deferred compensation expenses. The forecasted non-gaap income is 22.2% and 20.3 % of non-gaap revenue for fiscal year 2006 and the September 2005 quarter, respectively. Based on our non-gaap net income projections, non-gaap EPS is forecast at $0.99 for fiscal year 2006 and at $0.20 for the September 2005 quarter. From a balance sheet perspective selected data for cash and deferred revenue is as follows: Cash balances as of the merger date of July 2 nd 2005 were at $6.3 billion. It should be noted that the cash balance includes the proceeds from a $497 million loan that was incurred by VERITAS to facilitate their cash repatriation under the American Jobs Creation Act. This was paid off in early July. Deferred revenue as of the merger date is estimated at $1,479 million. This excludes $350 million of VERITAS deferred revenue resulting from purchase price adjustments. Including the $350 million of VERITAS deferred revenue the revised total is $1,829 million. Assuming this deferred non-gaap balance we would expect to recognize about $629 million in the September 2005 quarter. This is 53% of the non-gaap revenue projection of 1,180 million. Now, I would like to hand the call over to Helyn. Transition to Q&A Helyn Corcos, Vice President, Investor Relations, Symantec Thanks John. Operator will you please begin polling for questions. While the operator is polling for questions, I d like to announce that Symantec plans to attend the following 5 conferences: the RBC conference in San Francisco on August 2 nd, the Pacific Crest Conference in Vail on August 9 th, the CIBC conference in New York on August 10 th, the Citigroup conference in New York on September 7 th, and the CSFB Investor Summit in San Francisco on September 13 th. 12

13 For a complete list of investor related events, please visit our events calendar on the investor relations website. Operator, we are ready for the first question. Please direct all questions to investor relations at