Symantec 2006 Annual Report Download - page 2

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TWO YEAR SUMMARY OF FINANCIAL RESULTS
The non-GAAP information reflects the
combined results of Symantec and Veritas
Software, including adjustments based
on the fair values of assets acquired and
liabilities assumed by Symantec as of
the actual acquisition date of July 2, 2005.
For comparative purposes, the information
presented assumes that the acquisition
took place on April 1, 2004. Symantec’s
fiscal years ended March 31st whereas
Veritas’ fiscal years ended December 31st.
The 2005 fiscal year amounts combine
Symantec’s 2005 fiscal year with Veritas’
2004 fiscal year. The 2006 fiscal amounts
combine Symantec’s 2006 fiscal results
with Veritas’ historical results for the three
months ended March 31, 2005. Additional
non-GAAP adjustments consist of: non-cash
charges related to acquisitions, such as
the amortization of intangibles and stock-
based compensation expense, and the
write-off of in-process research and devel-
opment; restructuring charges; integration
planning costs; and the impact of other
special items, such as other stock-based
compensation expense, litigation mat-
ters, gain / loss on investments and related
adjustments to provision for income taxes,
on our operating results.
These non-GAAP financial measures are
not prepared in accordance with generally
accepted accounting principles and may
be different from non-GAAP financial mea-
sures used by other companies. Non-GAAP
financial measures should not be considered
a substitute for, or superior to, measures
of financial performance prepared in accor-
dance with GAAP.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS
(in millions, except per share amounts) 2006 2005
Revenue
GAAP Revenue $ 4,143 $ 2,583
Veritas revenue 559 2,042
Fair value adjustment to Veritas deferred revenue 302 -
Non-GAAP Revenue $ 5,004 $ 4,625
Gross Profit
GAAP Gross Profit $ 3,162 $ 2,131
Veritas gross profit 398 1,396
Fair value adjustment to Veritas deferred revenue 302 -
Integration planning 1 -
Amortization of acquired product rights 386 383
Amortization of deferred stock-based compensation 1 4
Non-GAAP Gross Profit $ 4,250 $ 3,914
Operating Expenses
GAAP Operating Expenses $ 2,888 $ 1,311
Veritas operating expenses 400 1,338
Amortization of other intangible assets (196) (193)
Amortization of deferred stock-based compensation (43) (24)
Acquired in-process research and development (285) (3)
Restructuring (25) 7
Integration planning (27) (3)
Patent settlement (2) -
Proposed SEC legal settlement (30) -
Executive incentive bonuses (10) -
Non-GAAP Operating Expenses $ 2,670 $ 2,433
Net Income
GAAP Net Income $ 157 $ 536
Gross margin adjustment 1,089 1,783
Operating expenses adjustment 218 (1,122)
Veritas other income and tax (12) (31)
Gain on strategic investments (1) (9)
Income tax provision (306) (111)
Non-GAAP Net Income $ 1,145 $ 1,046
Earnings Per Share
GAAP Earnings Per Share - diluted $ 0.15 $ 0.74
Non-GAAP adjustments per share - diluted 0.85 0.12
Non-GAAP Earnings Per Share - diluted $ 1.00 $ 0.86
Deferred Revenue
GAAP Deferred Revenue $ 2,163 $ 1,330
Veritas deferred revenue - 548
Fair value adjustment to Veritas deferred revenue 58 -
Non-GAAP Deferred Revenue $ 2,221 $ 1,878