Gen Digital 8K Results of Operations and Financial Condition | GEN 29 Jul 09

Exhibit 99.01

News Release


MEDIA CONTACT:		INVESTOR CONTACT:
Melissa Martin		Helyn Corcos
Symantec Corp.		Symantec Corp.
408-517-8475		408-517-8324
Melissa_martin@symantec.com		Hcorcos@symantec.com

Symantec Reports First Quarter Fiscal Year 2010 Results

-Non-GAAP Revenue of $1.44 billion

- -Non-GAAP Operating Margin of 28.5 percent

- -Non-GAAP Earnings Per Share of $0.34

- -Non-GAAP Deferred Revenue of $2.98 billion

- -Cash Flow from Operations $371 million

CUPERTINO, Calif. — July 29, 2009 —Symantec Corp. (Nasdaq:SYMC) today reported the results of its first quarter of fiscal year 2010, ended July 3, 2009. GAAP revenue for the fiscal first quarter was $1.43 billion. Non-GAAP revenue was $1.44 billion, down 13 percent (down 4 percent after adjusting for currency and the extra 14^th week in the first quarter of fiscal year 2009) over the comparable period a year ago. Non-GAAP revenue for the year-ago period included approximately $75 million of one-time benefit from the extra week of activity. Year-over-year, foreign currency fluctuations negatively impacted non-GAAP revenue by approximately $75 million.

“We are pleased with the performance of the consumer business and our award-winning Norton 2009 products. On the enterprise side, some customers focused their spending on shorter-term contracts or maintenance renewals, resulting in fewer new license deals, but stronger deferred revenue,” said Enrique Salem, president and chief executive officer, Symantec. “We’ve laid the groundwork to drive improved execution in the second half of the fiscal year.”

“Our ongoing focus on expense management resulted in earnings per share within the guided range,” said James Beer, executive vice president and chief financial officer, Symantec.

GAAP Results:GAAP operating income for the first quarter of fiscal year 2010 was $152 million compared with $278 million for the same quarter last year. GAAP net income for the first quarter of fiscal year 2010 was $73 million compared with $172 million for the same quarter last year. GAAP diluted earnings per share were $0.09 compared with earnings per share of $0.20 for the same quarter last year.

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Symantec Reports First Quarter Fiscal Year 2010 Results
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GAAP deferred revenue as of July 3, 2009 was $2.97 billion compared with $3.01 billion as of July 4, 2008. Cash flow from operating activities for the first quarter of fiscal year 2010 was $371 million compared with $414 million for the same quarter last year. Cash flow from operating activities for the year-ago period included approximately $47 million of benefit from currency and the extra week.

Non-GAAP Results:Non-GAAP operating margin for the first quarter of fiscal year 2010 was 28.5 percent compared with 29.3 percent for the same quarter last year (flat year-over-year after adjusting for currency and the extra week).

Non-GAAP net income for the first quarter of fiscal year 2010 was $285 million compared with $342 million for the same quarter last year. Non-GAAP diluted earnings per share were $0.34 compared with earnings per share of $0.40 for the year-ago quarter. Non-GAAP earnings per share for the year ago period included approximately $0.03 of one-time benefit generated from the extra week.

Non-GAAP deferred revenue as of July 3, 2009 was $2.98 billion compared with $3.03 billion as of July 4, 2008. After adjusting for currency and the extra week, non-GAAP deferred revenue increased 2 percent year-over-year.

For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached consolidated financial statements.

During the first quarter of fiscal year 2010, we purchased 7.9 million shares at an average price of $15.59, equivalent to $123 million.

Business Segment and Geographic Highlights

During the first quarter of fiscal year 2010, the company modified its segment reporting structure to more readily match its operating structure. The following modifications were made to the segment reporting structure: Enterprise Vault products were moved to the Storage and Server Management segment from the Security and Compliance segment, and the Software-as-a-Service (SaaS) offerings were moved to either the Security and Compliance or the Storage and Server Management segment from the Services segment based on the nature of the service delivered. Fiscal year 2009 Enterprise Vault revenue of $197 million and fiscal year 2009 SaaS revenue of $51 million was moved. The predominant amount for SaaS went to the Security and Compliance segment. There were no changes to the Consumer segment. The historical periods have been updated in the attached consolidated financial statements to reflect the modified reporting segments.

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Symantec Reports First Quarter Fiscal Year 2010 Results
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For the quarter, Symantec’s Storage and Server Management segment represented 38 percent of total non-GAAP revenue and declined 17 percent year-over-year (declined 8 percent after adjusting for currency and the extra week). The Consumer business represented 31 percent of total non-GAAP revenue and declined 4 percent year-over-year (increased 6 percent after adjusting for currency and the extra week). The Security and Compliance segment represented 24 percent of total non-GAAP revenue and declined 14 percent year-over-year (declined 4 percent after adjusting for currency and the extra week). Services represented 7 percent of total non-GAAP revenue and declined 20 percent year-over-year (declined 15 percent after adjusting for currency and the extra week).

International revenue represented 50 percent of total non-GAAP revenue in the first quarter of fiscal year 2010 and declined 17 percent year-over-year (declined 5 percent after adjusting for currency and the extra week). The Europe, Middle East and Africa region represented 30 percent of total non-GAAP revenue for the quarter and declined 22 percent year-over-year (declined 7 percent after adjusting for currency and the extra week). The Asia Pacific/Japan revenue for the quarter represented 15 percent of total non-GAAP revenue and declined 6 percent year-over-year (increased 1 percent after adjusting for currency and the extra week). The Americas, including the United States, Latin America and Canada, represented 55 percent of total non-GAAP revenue and declined 9 percent year-over-year (declined 3 percent after adjusting for currency and the extra week).

Second Quarter Fiscal Year 2010 Guidance

Guidance assumes an exchange rate of $1.40 per Euro for the September 2009 quarter versus the actual weighted average rate of $1.49 per Euro for the September 2008 quarter, approximately a 6 percent negative currency impact. The end of the period rate for the September 2008 quarter was $1.38, approximately a 1 percent currency benefit versus the $1.40 per Euro assumption for the September 2009 quarter.

For the second quarter of fiscal year 2010, ending Oct. 2, 2009, GAAP revenue is estimated between $1.395 billion and $1.445 billion. GAAP diluted earnings per share are estimated between $0.14 and $0.16. GAAP deferred revenue is expected to be in the range of $2.747 billion and $2.847 billion.

Non-GAAP revenue for the second quarter of fiscal year 2010 is estimated between $1.40 billion and $1.45 billion. Non-GAAP diluted earnings per share are estimated between $0.32 and $0.34. Non-GAAP deferred revenue is expected to be in the range of $2.75 billion and $2.85 billion.

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 first quarter 2010, ended July 3, 2009, 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.

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Symantec Reports First Quarter Fiscal Year 2010 Results
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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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NOTE TO EDITORS:If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room athttp://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 projections of future revenue, earnings per share and deferred revenue, as well as projections of amortization of acquisition-related intangibles and stock-based compensation and restructuring charges. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: general economic conditions; maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors sections of our Form 10-K for the year ended April 3, 2009.

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), impairment charges 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 atwww.symantec.com/invest

SYMANTEC CORPORATION
Condensed Consolidated Balance Sheets
(In millions)


	July 3,		April 3,
	2009		2009

	(Unaudited)		*
ASSETS
Current assets:
Cash and cash equivalents	$	2,192	$	1,793
Short-term investments		24		199
Trade accounts receivable, net		619		837
Inventories		24		27
Deferred income taxes		168		163
Other current assets		279		278

Total current assets		3,306		3,297

Property and equipment, net		985		973
Intangible assets, net		1,486		1,639
Goodwill		4,589		4,561
Investment in joint venture		84		97
Long-term deferred income taxes		6		7
Other long-term assets		73		64

Total assets	$	10,529	$	10,638


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	226	$	190
Accrued compensation and benefits		292		374
Current deferred revenue		2,581		2,644
Income taxes payable		19		44
Other current liabilities		274		261

Total current liabilities		3,392		3,513

Convertible senior notes		1,792		1,766
Long-term deferred revenue		392		419
Long-term deferred tax liabilities		190		181
Long-term income taxes payable		573		522
Other long-term liabilities		78		90

Total liabilities		6,417		6,491

Total stockholders’ equity		4,112		4,147

Total liabilities and stockholders’ equity	$	10,529	$	10,638


*		Derived from audited financials, as adjusted for the retrospective adoption of FSP APB No. 14-1.

SYMANTEC CORPORATION
Condensed Consolidated Statements of Operations
(In millions, except per share data)


							Year-Over-Year
	Three Months Ended						Growth Rate
	July 3,			July 4,						Constant
	2009			2008*			Actual			Currency (1)
Net revenues:
Content, subscriptions, and maintenance	$	1,209		$	1,291
Licenses		223			359

Total net revenues		1,432			1,650			-13	%		-9	%

Cost of revenues:
Content, subscriptions, and maintenance		209			219
Licenses		5			8
Amortization of acquired product rights		98			85

Total cost of revenues		312			312			0	%		1	%

Gross profit		1,120			1,338			-16	%		-11	%

Operating expenses:
Sales and marketing		559			663
Research and development		221			232
General and administrative		89			93
Amortization of other purchased intangible assets		62			55
Restructuring		34			17
Impairment of assets held for sale		3			—

Total operating expenses		968			1,060			-9	%		-3	%

Operating income:		152			278			-45	%		-41	%
Interest income		2			18
Interest expense		(32	)		(33	)
Other income (expense), net		6			—

Income before income taxes and loss from joint venture		128			263
Provision for income taxes		42			85
Loss from joint venture		13			6

Net income	$	73		$	172			-58	%		N/A

Basic net income per share	$	0.09		$	0.21			N/A			N/A
Diluted net income per share	$	0.09		$	0.20			N/A			N/A
Basic weighted-average shares outstanding		816			839			N/A			N/A
Diluted weighted-average shares outstanding		827			854			N/A			N/A


*		As adjusted for the retrospective adoption of FSP APB No. 14-1.

(1)		Management refers to growth rates adjusting for currency so that the business results can be viewed without the impact of fluctuations in foreign currency exchange rates. We compare the percent change in the results from one period to another period in order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States Dollars at the actual exchange rates in effect during the respective prior periods (or, in the case of deferred revenue, converted into United States Dollars at the actual exchange rate in effect at the end of the prior period).

SYMANTEC CORPORATION
Condensed Consolidated Statements of Cash Flows
(In millions)


	Three Months Ended
	July 3,			July 4,
	2009			2008*
*OPERATING ACTIVITIES:*
Net income	$	73		$	172

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		221			200
Amortization of discount on senior convertible notes		25			24
Stock-based compensation expense		49			45
Impairment of assets held for sale		3			—
Deferred income taxes		11			6
Income tax (expense) benefit from the exercise of stock options		(1	)		10
Excess income tax benefit from the exercise of stock options		(3	)		(9	)
Loss from joint venture		13			6
Other		3			6
Net change in assets and liabilities, excluding effects of acquisitions:
Trade accounts receivable, net		229			119
Inventories		4			6
Accounts payable		16			(9	)
Accrued compensation and benefits		(90	)		(91	)
Deferred revenue		(142	)		(70	)
Income taxes payable		(19	)		(31	)
Other assets		(22	)		81
Other liabilities		1			(51	)

Net cash provided by operating activities		371			414

*INVESTING ACTIVITIES:*
Purchase of property and equipment		(54	)		(58	)
Proceeds from sale of property and equipment		2			—
Cash returned from (payments for) business acquisitions, net		3			(166	)
Purchase of equity investment		(16	)		—
Purchases of available-for-sale securities		(2	)		(173	)
Proceeds from sales of available-for-sale securities		183			472

Net cash provided by investing activities		116			75

*FINANCING ACTIVITIES:*
Net proceeds from sales of common stock under employee stock benefit plans		11			75
Excess income tax benefit from the exercise of stock options		3			9
Tax payments related to restricted stock issuance		(18	)		(15	)
Repurchase of common stock		(123	)		(200	)
Repayment of short-term borrowing		—			(200	)
Repayment of other long-term liability		(1	)		(2	)

Net cash used in financing activities		(128	)		(333	)

Effect of exchange rate fluctuations on cash and cash equivalents		40			(1	)

Change in cash and cash equivalents		399			155
Beginning cash and cash equivalents		1,793			1,890

Ending cash and cash equivalents	$	2,192		$	2,045


*		As adjusted for the retrospective adoption of FSP APB No. 14-1.

SYMANTEC CORPORATION
Reconciliation of Selected GAAP Measures to Non-GAAP Measures⁽¹⁾
(In millions, except per share data)


																			Year-Over-Year
	Three Months Ended																		Non-GAAP Growth Rate
	July 3, 2009									July 4, 2008												Adjusted for
	GAAP			Adj			Non-GAAP			GAAP			Adj			Non-GAAP			Actual			extra week and FX (2)

Net revenues:	$	1,432		$	12		$	1,444		$	1,650		$	5		$	1,655			-13	%		-4	%

Gross profit:	$	1,120		$	115		$	1,235		$	1,338		$	94		$	1,432			-14	%		-4	%
Deferred revenue related to acquisitions					12									5
Stock-based compensation					5									4
Amortization of acquired product rights					98									85


Gross margin %		78	%					86	%		81	%					87	%	-100 bps			0 bps


Operating expenses:	$	968		$	(144	)	$	824		$	1,060		$	(113	)	$	947			-13	%		-4	%
Stock-based compensation					(44	)								(41	)
Amortization of other intangible assets					(63	)								(55	)
Restructuring					(34	)								(17	)
Impairment of assets held for sale					(3	)								—


Operating expenses as a % of revenue		68	%					57	%		64	%					57	%


Operating income	$	152		$	259		$	411		$	278		$	207		$	485			-15	%		-4	%


Operating margin %		11	%					28	%		17	%					29	%	-80 bps			0 bps


Net income:	$	73		$	212		$	285		$	172		$	170		$	342			-17	%		N/A
Gross profit adjustment					115									94
Operating expense adjustment					144									113
Non-cash interest expense					25									24
Gain on sale of assets					(4	)								—
Joint venture:
Amortization of other intangible assets/ stock-based compensation					2									1
Income tax effect on above items					(70	)								(62	)


Diluted net income per share	$	0.09		$	0.25		$	0.34		$	0.20		$	0.20		$	0.40			-15	%		N/A


Diluted weighted-average shares outstanding		827						827			854						854			-3	%		N/A

(1) This presentation includes non-GAAP measures. Our non-GAAP measures 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 measures prepared in accordance with GAAP. For a detailed explanation of these non-GAAP Measures, please see Symantec’s Explanation of Non-GAAP Measures in Appendix A.

(2) We have a 52/53-week fiscal accounting year. The three months ended July 4, 2008 consisted of 14 weeks, whereas the three months ended July 3, 2009 consisted of 13 weeks. Management refers to growth rates adjusting for the extra week and currency fluctuations in foreign currency exchange rates so that the business results can be viewed without the impact of these items. We compare the percent change in the results from one period to another period in order to provide a framework for assessing how our underlying businesses performed. To exclude the effects of foreign currency rate fluctuations, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States Dollars at the actual exchange rates in effect during the respective prior periods (or, in the case of deferred revenue, converted into United States Dollars at the actual exchange rate in effect at the end of the prior period).

SYMANTEC CORPORATION

Reconciliation of Revenue Detail and Deferred Revenue^{(1, 2, 3)}
(In millions)
(Unaudited)


	Three Months Ended
	July 3, 2009								July 4, 2008
	GAAP			Adj		Non-GAAP			GAAP			Adj		Non-GAAP
Revenue	$	1,432		$	12	$	1,444		$	1,650		$	5	$	1,655
Y/Y Growth Rate		-13	%				-13	%		18	%				16	%
Y/Y Change Adjusted for extra week and FX		-4	%				-4	%		5	%				4	%
Revenue by Segment
Consumer	$	447		$	6	$	453		$	472		$	1	$	473
Security and Compliance		336			6		342			393			3		396
Storage and Server Management		553			—		553			665			1		666
Services		96			—		96			120			—		120
Other		—			—		—			—			—		—
Revenue by Segment: Y/Y Growth Rate
Consumer		-5	%				-4	%		11	%				12	%
Security and Compliance		-15	%				-14	%		12	%				9	%
Storage and Server Management		-17	%				-17	%		22	%				21	%
Services		-20	%				-20	%		45	%				38	%
Other		*					*			*					*
Revenue by Segment: Y/Y Change Adjusted for extra week and FX
Consumer		5	%				6	%		-1	%				-1	%
Security and Compliance		-5	%				-4	%		1	%				-2	%
Storage and Server Management		-8	%				-8	%		9	%				8	%
Services		-15	%				-15	%		36	%				30	%
Other		*					*			*					*
Revenue by Geography
International	$	716		$	6	$	722		$	865		$	1	$	866
US		716			6		722			785			4		789
Americas (US, Latin America, Canada)		784			6		790			861			4		865
EMEA		433			5		438			558			1		559
Asia Pacific & Japan		215			1		216			231			—		231
Revenue by Geography: Y/Y Growth Rate
International		-17	%				-17	%		20	%				19	%
US		-9	%				-8	%		15	%				13	%
Americas (US, Latin America, Canada)		-9	%				-9	%		15	%				13	%
EMEA		-22	%				-22	%		22	%				20	%
Asia Pacific & Japan		-7	%				-6	%		21	%				20	%
Revenue by Geography: Y/Y Change Adjusted for extra week and FX
International		-5	%				-5	%		2	%				1	%
US		-3	%				-3	%		8	%				7	%
Americas (US, Latin America, Canada)		-3	%				-3	%		8	%				6	%
EMEA		-8	%				-7	%		2	%				0	%
Asia Pacific & Japan		1	%				1	%		5	%				4	%

Deferred Revenue	$	2,973		$	8	$	2,981		$	3,012		$	13	$	3,025

Y/Y Growth Rate		-1	%				-1	%		13	%				12	%
Y/Y Change Adjusted for extra week and FX		3	%				2	%		6	%				5	%


*		Percentage not meaningful

(1)		This presentation includes non-GAAP measures. Our non-GAAP measures 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 measures prepared in accordance with GAAP. For a detailed explanation of these non-GAAP measures, please see Symantec’s Explanation of Non-GAAP Measures in Appendix A.

(2)		We have a 52/53-week fiscal accounting year. The three months ended July 4, 2008 consisted of 14 weeks, whereas the three months ended July 3, 2009 consisted of 13 weeks. Management refers to growth rates adjusting for the extra week and currency fluctuations in foreign currency exchange rates so that the business results can be viewed without the impact of these items. We compare the percent change in the results from one period to another period in order to provide a framework for assessing how our underlying businesses performed. To exclude the effects of foreign currency rate fluctuations, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States Dollars at the actual exchange rates in effect during the respective prior periods (or, in the case of deferred revenue, converted into United States Dollars at the actual exchange rate in effect at the end of the prior period).

(3)		During the first quarter of fiscal 2010, we modified our segment reporting structure to more readily match our operating structure. See Appendix A for further details.

SYMANTEC CORPORATION
Guidance — Reconciliation of GAAP to Non-GAAP Targets
(In millions, except per share data)
(Unaudited)

We include certain non-GAAP measures in the tracking and forecasting of our earnings and management of our business. For a detailed explanation of these non-GAAP measures, please see Symantec’s Explanation of Non-GAAP Measures in Appendix A.


	Three Months Ending
	October 2, 2009
Revenue reconciliation
GAAP revenue range	$	1,395 - $1,445
Add back:
Deferred revenue related to acquisitions		5

Non-GAAP revenue range	$	1,400 - $1,450


	Three Months Ending
	October 2, 2009
Earnings per share reconciliation
GAAP diluted earnings per share range
Add back:	$	0.14 - $0.16
Stock-based compensation, net of tax		0.04
Deferred revenue related to acquisitions, amortization of acquired product rights, other intangible assets and non-cash interest expense, net of tax		0.14

Non-GAAP diluted earnings per share range	$	0.32 - $0.34


	As of
	October 2, 2009
Deferred revenue reconciliation
GAAP deferred revenue range	$	2,747 - $2,847
Add back:
Deferred revenue related to acquisitions		3

Non-GAAP deferred revenue range	$	2,750 - $2,850

SYMANTEC CORPORATION
Explanation of Non-GAAP Measures
Appendix A

The non-GAAP financial measures included in the tables adjust for the following items: business combination accounting entries, stock-based compensation expense, restructuring charges, charges related to the amortization of intangible assets and acquired product rights, impairments of assets and certain other items. We believe the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance for the reasons discussed below. Our management uses these non-GAAP financial measures in assessing the Company’s operating results, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of the Company’s performance to prior periods and to our peers and that investors benefit from an understanding of these non-GAAP financial measures.

Fair value adjustment to deferred revenue. We have completed several business combinations and acquisitions for a variety of strategic purposes over the past few years. As is the case with our existing business, at the time of acquisition, these acquired businesses recorded deferred revenue related to past transactions for which revenue would have been recognized by the acquired entity in future periods as revenue recognition criteria were satisfied. However, the purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with obligations we assumed to provide maintenance or support to customers of the acquired business that was excluded as a result of these purchase accounting adjustments. We believe that this non-GAAP revenue presentation is appropriate both because it reveals, on a basis consistent with our own revenue recognition policies, the revenue associated with maintenance and support obligations assumed by us and because we have historically experienced high renewal rates on our acquired maintenance and support contracts. We also believe that the non-GAAP revenue disclosures enhance investors’ ability to conduct period-over-period analyses of our results that reflect the full impact of the acquired business’s results together with the results from our pre-existing products and services.

Stock-based compensation: Consists of expenses for employee stock options, restricted stock units, restricted stock awards and our employee stock purchase plan determined in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 123R,Share-Based Payment. When evaluating the performance of our individual business units and developing short and long term plans, we do not consider stock-based compensation charges. Our management team is held accountable for cash-based compensation, but we believe that management is limited in its ability to project the impact of stock-based compensation and accordingly is not held accountable for its impact on our operating results. Although stock-based compensation is necessary to attract and retain quality employees, our consideration of stock- based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies. Furthermore, unlike cash-based compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control.


	Three months ended
	July 3,		July 4,
	2009		2008
Cost of revenues	$	5	$	4
Sales and marketing		18		19
Research and development		17		13
General and administrative		9		9

Total stock-based compensation	$	49	$	45

Amortization of acquired product rights and other intangible assets: When conducting internal development of intangible assets, accounting rules require that we expense the costs as incurred. In the case of acquired businesses, however, we are required to allocate a portion of the purchase price to the accounting value assigned to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangibles. The acquired company, in most cases, has itself previously expensed the costs incurred to develop the acquired intangible assets, and the purchase price allocated to these assets is not necessarily reflective of the cost we would incur in developing the intangible asset. We eliminate these amortization charges from our non-GAAP operating results to provide better comparability of pre and post-acquisition operating results and comparability to results of businesses utilizing internally developed intangible assets.

Restructuring: We have engaged in various restructuring activities over the past several years that have resulted in costs associated with severance, benefits, outplacement services, and excess facilities. Each restructuring has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring activities in the ordinary course of business. While our operations previously benefited from the employees and facilities covered by our various restructuring charges, these employees and facilities have benefited different parts of our business in different ways, and the amount of these charges has varied significantly from period to period. We believe that it is important to understand these charges; however, we do not believe that these charges are indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them.

Joint venture: Consistent with the reasons discussed above, we exclude stock-based compensation charges and amortization of other intangible assets related to the joint venture from our non-GAAP net income.

SYMANTEC CORPORATION
Explanation of Non-GAAP Measures
Appendix A (continued)

Gain on sale of assets: We exclude these gains because they are unique one-time occurrences that are not closely related to, or a function of, our ongoing operations.

Non-cash interest expense: Effective April 4, 2009, we adopted Financial Accounting Standards Board’s Staff Position No. APB 14-1,Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)(FSP APB 14-1), which changes the method of accounting for our convertible notes. Under this new accounting method, our EPS and net income calculated in accordance with GAAP will be reduced as a result of recognizing incremental non-cash interest expense. We believe it is useful to provide a non-GAAP financial measure that excludes this incremental non-cash interest expense in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies.

Impairment of assets held for sale: We have committed to sell certain buildings and land. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we have classified these assets as held for sale and adjusted the assets’ carrying value when above the fair market value less cost to sell. We do not believe that these charges are indicative of future operating results and believe that investors benefit from an understanding of our operating results without giving effect to them.

Segment reporting: During the first quarter of fiscal year 2010, the company modified its segment reporting structure to more readily match its operating structure. The following modifications were made to the segment reporting structure: Enterprise Vault products were moved to the Storage and Server Management segment from the Security and Compliance segment; and the Software-as-a-Service (SaaS) offerings were moved to either the Security and Compliance or the Storage and Server Management segment from the Services segment based on the nature of the service delivered. Fiscal year 2009 Enterprise Vault revenue of $197 million and fiscal year 2008 revenue of $168 million was moved, and fiscal year 2009 SaaS revenue of $51 million was moved. The predominant amount of SaaS revenue went to the Security and Compliance segment. The historical periods have been adjusted to reflect the modified reporting structure.

Gen Digital (GEN) 8-KResults of Operations and Financial Condition