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Press Release

VERITAS Software Reports Record Quarterly Revenue of $574 Million

Annual Revenue Grows 17% to $2.042 Billion
MOUNTAIN VIEW, Calif. - January 27, 2005 - VERITAS Software Corporation (Nasdaq: VRTS) today announced financial results for the quarter ended December 31, 2004. Revenue for the quarter ended December 31, 2004 was a record $574 million, compared to revenue of $502 million for the same period a year ago, representing 14 percent growth year over year. Revenue for the year ended December 31, 2004 was $2.042 billion, compared to revenue of $1.747 billion for the same period a year ago, representing 17 percent growth year over year.
GAAP net income for the quarter ended December 31, 2004 was $129 million, or $0.30 per diluted share, compared to GAAP net income of $191 million, or $0.43 per diluted share, for the same period a year ago. Included in GAAP net income for the quarter ended December 31, 2004 are charges totaling $9 million, net of taxes, which include the amortization of intangibles and stock-based compensation offset by a gain on strategic investments. GAAP net income for the quarter ended December 31, 2003 included a one-time tax benefit of approximately $95 million attributable to the settlement of tax audits related to the Company's 2000 acquisition of Seagate Technology, offset by charges for the amortization of intangibles and stock-based compensation of $4 million, net of taxes.
GAAP net income for the year ended December 31, 2004 was $411 million, or $0.94 per diluted share, compared to GAAP net income of $347 million, or $0.80 per diluted share, for the same period a year ago. Included in GAAP net income for the year ended December 31, 2004 are charges totaling $17 million, net of taxes, which include the amortization of intangibles and stock-based compensation and the write-off of in-process research and development offset by gains on strategic investments and restructuring reversals. For the same period a year ago, GAAP net income included a net benefit of $17 million, net of taxes, which included charges for the amortization of intangibles and stock-based compensation, the write-off of in-process research and development, losses on strategic investments, a loss on the extinguishment of debt and a cumulative effect of change in accounting principle related to the adoption of FASB Interpretation No. 46 "Consolidation of Variable Interest Entities" offset by the one-time tax benefit related to Seagate Technology.
"As a result of our outstanding fourth quarter performance, we achieved the highest revenue quarter in the company's history and exceeded our $2 billion goal for the year with revenues of $2.042 billion," said Gary Bloom, chairman, president and CEO, VERITAS Software. "We attribute our success to our focused execution of our 3-dimensional growth strategy of expanding our product portfolio, delivering these products on a broad range of hardware and software platforms to further our heterogeneous advantage, and extending our worldwide reach by investing in sales and service capacity around the globe. Our international expansion investments continue to deliver strong results, with our EMEA and Asia Pacific/Japan regions growing 40 percent and 24 percent year-over-year, respectively."
"Once again we've leveraged the revenue upside to generate both strong earnings and approximately $157 million in cash from operating activities this quarter, driving our cash and short-term investment balance to $2.55 billion," said Ed Gillis, executive vice president and chief financial officer, VERITAS Software. "With our solid performance against our goals in 2004 and our momentum exiting the year, we anticipate continued growth in 2005 as IT spending continues to improve. Our over performance in the fourth quarter, combined with the normal seasonal patterns of the software industry, leads us to set our revenue expectations for the quarter ending March 31, 2005 in the range of $525 to $540 million, and diluted earnings per share in the range of $0.18 to $0.20 on a GAAP basis. Our expectations for GAAP diluted earnings per share for the March quarter include the impact of certain expenses related to our planned merger with Symantec Corporation, which are estimated to be in the range of $15 to $20 million."

In addition to strong financial performance, VERITAS also achieved a number of key business milestones throughout the year:
  • Delivered new technologies and major product refreshes in virtually all product areas, including Backup Exec 10.0, which was successfully launched last week in New York City. This upgraded product is receiving positive reviews from channel partners and customers for its faster disk-based data recovery, cost-saving capabilities, and broader reach with the introduction of Backup Exec Suite;
  • Expanded product support for IBM AIX, HP Unix, Solaris x86, Intel Itanium 2 processor-based platform, and both Red Hat Enterprise and Suse Linux;
  • Strengthened the company's relationship with HP with the announcement of a new OEM agreement to be HP's preferred supplier of server-based storage virtualization solutions for highly available HP-UX 11i systems;
  • Strengthened important relationships with Network Appliance, Sun Microsystems, and a number of key systems integrators;
  • Completed three strategic acquisitions: Ejasent, Invio Software, and KVault Software, which expand the company's business into adjacent markets, such as Application Virtualization, IT Process Automation, E-mail Archiving and Compliance;
  • And, as a result, fortified the company's leadership position in all key markets, including storage software, backup and recovery, storage management, file system and archiving.
On December 16, 2004, VERITAS announced that it entered into a definitive agreement to merge with Symantec Corporation in an all-stock transaction. The leader in storage software and the leader in security software will provide enterprise customers with a more effective way to secure and manage their most valuable asset—their information. The combined company will be uniquely positioned to deliver information security and availability solutions across all platforms, from the desktop to the data center, from consumers and small businesses to large organizations and service providers. The transaction is expected to close in the second calendar quarter of 2005 and is subject to customary closing conditions, including approval by the shareholders of both companies, and regulatory approvals.
The company will hold a conference call today at 2:00 p.m. Pacific Time, 5:00 p.m. Eastern Time, to review the results and business outlook. The conference call will be available to all investors. The telephone dial-in number for listen-only access to the live call is 719-457-2727, passcode: 413264. A live webcast and a reconciliation of GAAP to Non-GAAP financial measures will also be available at www.veritas.com, Investor section. In addition, a replay will be available via audio webcast at www.veritas.com, Investor section, beginning on Thursday, January 27 at 4:00 p.m. Pacific Time until March 31, 2005 and via telephone at (719) 457-0820, replay code: 413264.

About VERITAS Software

VERITAS Software, one of the 10 largest software companies in the world, is a leading provider of software and services to enable utility computing. In a utility computing model, IT resources are aligned with business needs, and business applications are delivered with optimal performance and availability on top of shared computing infrastructure, minimizing hardware and labor costs. With 2004 revenue of $2.04 billion, VERITAS delivers products and services for data protection, storage & server management, high availability and application performance management that are used by 99 percent of the Fortune 500. More information about VERITAS Software can be found at www.veritas.com.

Safe Harbor Statement

This press release contains unaudited financial information for the year and quarter ended December 31, 2004 and forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including statements relating to projections of future revenue and earnings, continued positive momentum in our business, continued improvement in IT spending and completion and results of our proposed merger with Symantec Corporation. These forward-looking statements involve a number of risks and uncertainties, including the risk that: adjustments to our unaudited financial statements may be identified through the course of our independent registered public accounting firm completing its integrated audit of our financial statements and financial controls; economic conditions generally or IT spending specifically may decline and cause a reduction in customer demand for our products and services; we will not gain market acceptance of our products and services; we may lose market share to existing or new competitors; we may be unable to adequately manage our business in response to changing market conditions; our business may be negatively affected due to the announcement of our proposed merger with Symantec; and we may be unable to complete our proposed merger with Symantec. These and other factors could cause our actual results to differ materially from what we project in our forward-looking statements. For more information regarding potential risks, see the "Factors That May Affect Future Results" section of our most recent quarterly report on Form 10-Q for the quarter ended September 30, 2004 and annual report on Form 10-K for the year ended December 31, 2003, which are on file with the SEC. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date hereof.

Additional Information and Where to Find It

Symantec Corporation and VERITAS intend to file a registration statement on Form S-4 containing a joint proxy statement/prospectus in connection with the proposed merger transaction involving Symantec and VERITAS. Investors and security holders are urged to read this filing when it becomes available because it will contain important information about the proposed merger transaction. Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the SEC at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Symantec by contacting Symantec Investor Relations at 408-517-8239. Investors and security holders may obtain free copies of the documents filed with the SEC by VERITAS by contacting VERITAS Investor Relations at 650-527-4523.
Symantec, VERITAS and their directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Symantec and VERITAS in connection with the proposed merger transaction. Information regarding the special interests of these directors and executive officers in the proposed merger transaction will be included in the joint proxy statement/prospectus of Symantec and VERITAS described above. Additional information regarding the directors and executive officers of Symantec is also included in Symantec's proxy statement for its 2004 Annual Meeting of Stockholders, which was filed with the SEC on July 30, 2004. Additional information regarding the directors and executive officers of VERITAS is also included in VERITAS' proxy statement for its 2004 Annual Meeting of Stockholders, which was filed with the SEC on July 21, 2004. These documents are available free of charge at the SEC's web site at www.sec.gov and from Investor Relations at Symantec and VERITAS as described above.

For More Information Contact:

Press Contact:
Andrew McCarthy , Corporate Communications , VERITAS Software
(650) 527-3183 , andrew.mccarthy@veritas.com

Investor Contact:
Renee Budig , Vice President, Investor Relations , VERITAS Software
(650) 527-4047 , renee.budig@veritas.com
Copyright © 2005 VERITAS Software Corporation. All rights reserved. VERITAS and the VERITAS Logo are trademarks or registered trademarks of VERITAS Software Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.