Forward-Looking Statements and Factors That May Affect Future Results

The discussion below contains forward-looking statements, which are subject to safe harbors under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include references to our ability to utilize our deferred tax assets, as well as statements including words such as "expects," "plans," "anticipates," "believes," "estimates," "predicts," "projects," and similar expressions. In addition, statements that refer to projections of our future financial performance, anticipated growth and trends in our businesses and in our industries, the anticipated impacts of acquisitions, and other characterizations of future events or circumstances are forward-looking statements. These statements are only predictions, based on our current expectations about future events and may not prove to be accurate. We do not undertake any obligation to update these forward-looking statements to reflect events occurring or circumstances arising after the date of this report. These forward-looking statements involve risks and uncertainties, and our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements on the basis of several factors, including those that we discuss in Risk Factors, set forth in Part I, Item 1A, of our annual report on Form 10-K for the fiscal year ended March 28, 2008. We encourage you to read that section carefully.

Our Business

Symantec is a global leader in providing security, storage and systems management solutions to help businesses and consumers secure and manage their information. We provide customers worldwide with software and services that protect, manage and control information risks related to security, data protection, storage, compliance, and systems management. We help our customers manage cost, complexity and compliance by protecting their IT infrastructure as they seek to maximize value from their IT investments.

We have a 52/53-week fiscal accounting year. Unless otherwise stated, references to three and six month ended periods in this report relate to fiscal periods ended October 3, 2008 and September 28, 2007. The October 3, 2008 and September 28, 2007 quarters both consisted of 13 weeks. The six months ended October 3, 2008 consisted of 27 weeks while the six months ended September 28, 2007 consisted of 26 weeks.

Our Operating Segments

Our operating segments are significant strategic business units that offer different products and services, distinguished by customer needs. Since the March 2008 quarter, we have operated in five operating segments: Consumer Products, Security and Compliance, Storage and Server Management, Services, and Other. During the first quarter of fiscal 2009, we changed our reporting segments to better align our operating structure. Altiris services that were formerly included in the Security and Compliance segment were moved to the Services segment. This move is a result of operational changes in our Services segment and the continued integration of our Altiris business. We revised the segment information for the prior year to conform to the new presentation. For further descriptions of our operating segments, see Note 16 of the Notes to Condensed Consolidated Financial Statements in this quarterly report. Our reportable segments are the same as our operating segments.

Financial Results and Trends

Our net income was $140 million and $327 million, for the three and six months ended October 3, 2008, respectively, as compared to our net income of $50 million and $146 million for the three and six months ended September 28, 2007, respectively. The higher net income for the fiscal 2009 periods as compared to the same period last year was primarily due to higher revenues in each fiscal 2009 period.

Revenue for the three and six months ended October 3, 2008 was 7% and 12% higher than revenue for the three and six months ended September 28, 2007, respectively. During the three and six months ended October 3, 2008, we delivered revenue growth across all of our geographic regions as compared to the same periods last year and

experienced revenue growth in all of our segments. In addition to the foreign currency effects described below, we believe our increased revenue was largely driven by continued demand for our products as a result of the proliferation of structured and unstructured data, the need to simplify and standardize data center infrastructures, the convergence of endpoint security and management, and increased adoption of our Consumer Products suites. Our revenue growth is also attributable to increased awareness of Internet-related security threats around the world and demand for storage solutions. While we reported increased revenue year over year, we are not immune to macroeconomic conditions. For example, if the challenging economic conditions affecting global markets continue or deteriorate further, we may experience slower or negative revenue growth and our business and operating results might suffer. Our expectation is that currency changes may have a negative impact on year-to-year revenue and deferred revenue in the coming quarter. In light of these economic conditions, we will continue to align our cost structure with our revenue expectations.

Weakness in the U.S. dollar compared to foreign currencies positively impacted our international revenue growth by approximately $51 million and $153 million, respectively, during the three and six month periods ended October 3, 2008 as compared to the same periods last year, although this impact has been less than we experienced in recent quarters due to a relative strengthening of the U.S. dollar compared to foreign currencies during the September 2008 quarter. We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency exchange rates. If international sales become a greater portion of our total sales in the future, changes in foreign exchange rates may have a potentially greater impact on our revenues and operating results.

Critical Accounting Estimates

Income Taxes

The section entitled "Income Taxes" in our Critical Accounting Estimates section of our Form 10-K for fiscal year 2008 is hereby updated as follows:

In July 2008, we reached an agreement with the Internal Revenue Service ("IRS") concerning our eligibility to claim a lower tax rate on a distribution made from a Veritas foreign subsidiary prior to the July 2005 acquisition. The distribution was intended to be made pursuant to the American Jobs Creation Act of 2004, and therefore eligible for a 5.25% effective U.S. federal rate of tax, in lieu of the 35% statutory rate. The final impact of this agreement is not yet known since this relates to the taxability of earnings that are otherwise the subject of the tax years 2000-2001 transfer pricing dispute which in turn is being addressed in the U.S. Tax Court. To the extent that we owe taxes as a result of the transfer pricing dispute, we anticipate that the incremental tax due from this negotiated agreement will decrease. We currently estimate that the most probable outcome from this negotiated agreement will be $13 million or less, for which an accrual has already been made. As previously disclosed in Form 10-K for the fiscal year ended March 28, 2008, we made a payment of $130 million to the IRS for this matter in May 2006. We applied $110 million of this payment as a deposit on the outstanding transfer pricing matter for the tax years 2000-2001.

Fair Value of Financial Instruments

Beginning in the first fiscal quarter of 2009, the assessment of fair value for our financial instruments is based on the provisions of SFAS No. 157. SFAS No. 157 establishes a fair value hierarchy that is based on three levels of inputs and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

As of October 3, 2008, our financial instruments measured at fair value on a recurring basis included $1.2 billion of assets. Our cash equivalents, which primarily consist of commercial paper, money market funds and government notes, total $1.1 billion which is 93% of our total financial instruments measured at fair value on a recurring basis.

As of October 3, 2008, $406 million were classified as Level 1, $403 million (33% of total financial instruments fair valued on a recurring basis) of which represent investments in money market funds. These were classified as Level 1 because their valuations were based on quoted prices for identical securities in active markets. Determining fair value for Level 1 instruments generally does not require significant management judgment.

As of October 3, 2008, $825 million were classified as Level 2, $483 million and $249 million (60% together of total financial instruments fair valued on a recurring basis) of which represent investments in commercial paper and government notes, respectively. These were classified as Level 2 because their valuations were based on pricing models with all significant inputs derived from or corroborated by observable market prices for identical securities in markets with insufficient volume or infrequent transactions (less active markets). Level 2 inputs also generally include non-binding market consensus prices that are corroborated by observable market data; quoted prices for similar instruments; model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities or quoted prices for similar assets or liabilities. The level of judgment and subjectivity involved with Level 2 instruments generally includes:

• Determining which instruments are most similar to the instrument being priced and identifying a sample of similar securities based on the coupon rates, maturity, issuer, credit rating, and instrument type, and subjectively selecting an individual security or multiple securities that are deemed most similar to the security being priced. For most of our financial instruments classified as Level 2 at October 3, 2008, identical securities were used for determining fair value.

• Determining whether a market is considered active. An assessment of an active market for marketable securities generally takes into consideration trading volume for each instrument type or whether a trading market exists for a given instrument. Our Level 2 financial instruments were so classified due to either low trading activity in active markets or no active market existed. Where no active market existed, amortized cost was used and was assumed to equate to fair value because of the short maturities.

• Determining which model-derived valuations to use in determining fair value. When observable market prices for identical securities or similar securities are not available, we may price marketable securities using:
non-binding market consensus prices that are corroborated with observable market data; or pricing models, such as discounted cash flow approaches, with all significant inputs derived from or corroborated with observable market data. In addition, the credit ratings for issuers of debt instruments in which we are invested could change, which could lead to lower fair values. During the second quarter of 2009, the fair value of $22 million of fixed-income securities was determined using benchmark pricing models for identical or similar securities.

As of October 3, 2008, we have no financial instruments with unobservable inputs as classified in Level 3 under the SFAS No. 157 hierarchy. Level 3 instruments generally would include unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity.

Other than these changes, there have been no changes in our critical accounting estimates during the six months ended October 3, 2008 as compared to the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2008.

                             RESULTS OF OPERATIONS

Total Net Revenues


                                Three Months Ended                                         Six Months Ended
               October 3,       September 28,         Change in         October 3,       September 28,          Change in
                  2008              2007              $          %         2008              2007               $          %
                                                              ($ in thousands)

Net revenues   $ 1,518,010     $     1,419,089     $ 98,921       7 %   $ 3,168,332     $     2,819,427     $ 348,905       12 %

Net revenues increased for the three months ended October 3, 2008 as compared to the same period last year primarily due to $73 million in increased sales related to our Storage Foundation, Net Backup, Cluster Server and Information Risk Management products. The increase in demand for these product lines is driven by continued demand for products related to the standardization and simplification of data center infrastructures, demand for

products related to archiving solutions and the proliferation of structured and unstructured data. In addition, we realized revenues of approximately $20 million for the three months ended October 3, 2008 from sales of products gained from our fiscal 2008 acquisitions for which there is no comparable revenue in the same period last year.

The increase in revenues for the six months ended October 3, 2008 as compared to the same period last year is primarily due to $171 million in increased sales related to our Storage Foundation, Net Backup, and core Consumer products. The increase in demand for these product lines is driven by continued demand for products related to the standardization and simplification of data center infrastructures, the proliferation of structured and unstructured data, and increased adoption of our Consumer Products suites. We realized net revenues of approximately $35 million for the six months ended October 3, 2008 from the contribution of sales of products acquired from our fiscal 2008 acquisitions for which there is no comparable revenue in the same period last year. In addition, revenues for the six months ended October 3, 2008 benefited from additional amortization of deferred revenue of approximately $75 million as a result of the July 4, 2008 quarter being comprised of 14 weeks as compared to 13 weeks for the same period last year.

The revenue increases for the three and six months ended October 3, 2008 discussed above are further described in the segment discussions that follow.

Content, subscriptions, and maintenance revenues

                                              Three Months Ended                                          Six Months Ended
                             October 3,       September 28,         Change in          October 3,       September 28,          Change in
                                2008              2007              $          %          2008              2007               $          %
                                                                             ($ in thousands)

Content, subscriptions,
and maintenance revenues     $ 1,180,715     $     1,117,165     $ 63,550       6 %    $ 2,471,707     $     2,203,683     $ 268,024       12 %
Percentage of total net
revenues                              78 %                79 %                                  78 %                78 %

Content, subscriptions, and maintenance revenues increased for the three and six months ended October 3, 2008 as compared to the same periods last year primarily due to an increase of $61 million and $223 million, respectively, in revenue related to enterprise products and services. This increase in enterprise product and services revenue is largely attributable to demand for our Storage Foundation, Net Backup, Backup Exec, Cluster Server and Information Risk Management products, and consulting services as a result of increased demand for security and storage solutions. This increased demand was driven by the proliferation of structured and unstructured data, and increasing sales of services in conjunction with our license sales as a result of our focus on offering our customers a more comprehensive IT solution. To a lesser extent, content, subscriptions, and maintenance revenues for the six months ended October 3, 2008 benefited from an additional week of deferred revenue amortization as a result of the July 4, 2008 quarter being comprised of 14 weeks compared to 13 weeks for the same period last year.

Licenses revenues

                                                       Three Months Ended                                               Six Months Ended
                                     October 3,        September 28,           Change in             October 3,        September 28,           Change in
                                        2008               2007               $           %             2008               2007               $           %
                                                                                        ($ in thousands)

Licenses revenues                   $    337,295      $       301,924      $ 35,371        12 %     $    696,625      $       615,744      $ 80,881        13 %
Percentage of total net revenues              22 %                 21 %                                       22 %                 22 %

Licenses revenues increased for the three and six months ended October 3, 2008 as compared to the same periods last year primarily due to an increase of $39 million and $63 million, respectively, in revenue related to our Storage Foundation and Net Backup products. These increases are a result of increased demand for storage solutions driven by the proliferation of structured and unstructured data.

Net revenue and operating income by segment

Consumer Products segment

                                                  Three Months Ended                                          Six Months Ended
                                  October 3,       September 28,         Change in          October 3,       September 28,          Change in
                                     2008              2007              $         %           2008              2007              $          %
                                                                                 ($ in thousands)

Consumer Products revenues       $    437,654     $       433,508     $ 4,146       1 %    $    909,985     $       857,258     $ 52,727        6 %
Percentage of total net
revenues                                   29 %                31 %                                  29 %                30 %
Consumer Products operating
income                           $    235,303     $       226,372     $ 8,931       4 %    $    510,808     $       460,159     $ 50,649       11 %
Percentage of Consumer
Products revenues                          54 %                52 %                                  56 %                54 %

Consumer Products revenues increased for the three and six months ended October 3, 2008 as compared to the same period last year primarily due to an increase of $82 million and $180 million, respectively, in revenue from our new Consumer Products suite and to a lesser extent by a favorable impact of foreign currencies in relation to the U.S. dollar. This revenue increase is due to the increased electronic order demand for Norton 360 offset by declining retail sales during fiscal 2008. The revenue from our consumer products is generally recognized ratably over the 12 months after the product is sold. This increase is partially offset by aggregate decreases for the three and six months ended October 3, 2008 as compared to the same period last year of $76 million and $127 million, respectively, in revenue from our Norton Internet Security and Norton AntiVirus products. This decrease results from our customers' continued migration to our Norton 360 product, which offers broader protection and backup features to address the rapidly changing threat environment. Our electronic orders include sales derived from OEMs, subscriptions, upgrades, online sales, and renewals. Revenue from electronic orders (which includes sales of the aforementioned products) grew by $32 million and $95 million, respectively, for the three and six months ended October 3, 2008 as compared to the same period last year. Electronic orders constituted 79% and 78% of Consumer Products revenues for the three and six months ended October 3, 2008 as compared to 72% and 72%, respectively, for the same periods last year.

Operating income for this segment increased for the three and six months ended October 3, 2008 as compared to the same periods last year as revenue growth exceeded the growth in total expenses. Total expenses in our Consumer Products segment decreased for the three month ended October 3, 2008 by $5 million and increased for the six months ended October 3, 2008 by $2 million as compared to the same periods last year. Our operating expenses for the three and six months ended October 3, 2008 benefited from our continued cost containment measures.

Security and Compliance segment

                                                Three Months Ended                                           Six Months Ended
                               October 3,       September 28,          Change in           October 3,       September 28,          Change in
                                  2008              2007              $          %            2008              2007              $          %
                                                                               ($ in thousands)

Security and Compliance
revenues                      $    400,992     $       388,522     $ 12,470        3 %    $    846,639     $       776,191     $ 70,448        9 %
Percentage of total net
revenues                                26 %                27 %                                    27 %                28 %
Security and Compliance
operating income              $     62,427     $        49,148     $ 13,279       27 %    $    143,587     $       109,250     $ 34,337       31 %
Percentage of Security and
Compliance revenues                     16 %                13 %                                    17 %                14 %

Security and Compliance revenues increased for the three and six months ended October 3, 2008 as compared to the same periods last year by $12 million and $70 million, respectively, in revenue as a result of increased demand for endpoint management, increased demand for archiving solutions, and the successful integration of acquired products into our product portfolio.

Operating income for the Security and Compliance segment increased, as revenue growth exceeded the growth in total expenses for the segment. Total expenses from our Security and Compliance segment decreased for the three months ended October 3, 2008 as compared to the same period last year by $1 million. This was primarily as a result of continued cost containment measures. Total expenses increased for the six months ended October 3, 2008 as compared to the same period last year by $36 million. This was primarily due to higher overall sales and R&D expenses in addition to the inclusion of the Vontu acquisition in this segment.

Storage and Server Management segment

                                              Three Months Ended                                            Six Months Ended
                            October 3,       September 28,           Change in           October 3,       September 28,          Change in
                               2008              2007               $           %           2008              2007               $          %
                                                                             ($ in thousands)

Storage and Server
Management revenues        $    572,309     $       507,957     $  64,352        13 %    $ 1,187,465     $     1,013,537     $ 173,928       17 %
Percentage of total net
revenues                             38 %                36 %                                     37 %                36 %
Storage and Server
Management operating
income                     $    307,716     $       151,375     $ 156,341       103 %    $   614,056     $       373,991     $ 240,065       64 %
Percentage of Storage
and Server Management
revenues                             54 %                30 %                                     52 %                37 %

Storage and Server Management revenues increased for the three and six months ended October 3, 2008 as compared to the same period last year by $66 million and $176 million, respectively, in revenue driven by increased demand for products related to the standardization and simplification of data center infrastructures, increased demand for products supporting high availability and disaster recovery and due to the proliferation of structured and unstructured data.

Operating income for the Storage and Server Management segment increased for the three and six months ended October 3, 2008 as compared to the same period last year, as revenue growth exceeded the growth in total expenses for the segment. Total expenses in our Storage and Server Management segment decreased for the three and six months ended October 3, 2008 as compared to the same periods last year by $92 million and $66 million, respectively. These decreases primarily related to the asset impairment on the Application Performance Management ("APM") business divestiture of $87 million that occurred in the quarter ended September 28, 2007. Also, our operating expenses for the three and six months ended October 3, 2008 benefited from our continued cost containment measures.

Services segment

                                                        Three Months Ended                                                Six Months Ended
                                     October 3,        September 28,            Change in             October 3,         September 28,            Change in
                                        2008               2007                $           %             2008                2007                $           %
                                                                                          ($ in thousands)

. . .