Symantec : Q3 FY18 Earnings CFO Commentary

Non-GAAP Results for the Third Quarter of Fiscal Year 2018

Revenue

(In millions, except for percentages)	Q3FY18	Q3FY17	Adj. Growth(1)
Total revenue	$1,234	$1,088	2%
Enterprise Security revenue	639	691	(1)%
Consumer Digital Safety revenue	595	397	4%

(1)Growth rate represents organic growth adjusted for acquisitions and divestitures in constant currency. See the definition of organic growth rate on Definitions page.

Foreign currency impacts

Compared to our Q3 guidance, foreign currency negatively impacted revenue by $2 million. Compared to Q3 of last year, foreign currency positively impacted revenue by $22 million.

Enterprise Security Metric

Enterprise Security Implied Billings (In millions)	Q3FY18	Q3FY17	Y/Y Growth	Adj. Growth(1)
Total revenue Add: Deferred revenue at end of period Less: Deferred revenue at beginning of period Add: Deferred revenue adjustments(2)	$625 1,685 (1,484) 3	$644 1,654 (1,629) 54
Implied billings (Non-GAAP)	$829	$723	15%	27%

(1)Adjusted year over year growth excludes implied billings from our WSS & PKI solutions that were sold to DigiCert on October 31, 2017. These products contributed $35 million in revenue and $29 million in implied billings during Q3 FY18 and $104 million in revenues and $91 million in implied billings in Q3 FY17.

(2)Deferred revenue adjustment includes the change in deferred revenue related to Veritas discontinued operations. In addition, for Q3 FY18, the adjustment includes the in-quarter change in WSS & PKI deferred revenue prior to the divestiture that is not captured in the GAAP Enterprise Security deferred revenue change due to its classification as liabilities held for sale.

Consumer Digital Safety Metrics

Metric	Q3FY18	Q2FY18
Consumer Digital Safety Direct Customer Count (at quarter end)	21.3 million	21.3 million
Consumer Digital Safety Direct Average Revenue Per User	$8.38/month	$8.07/month
Non-GAAP Partner Revenue	$59 million	$61 million

These metrics are derived from data related to our Norton and LifeLock products that had different measurements historically. Therefore, we are unable to provide comparative metrics for the prior fiscal year. See the definition of each of these metrics on Definitions page.

Balance Sheet

Cash, cash equivalents and short-term investmentsat the end of the quarter was $2.5 billion of which approximately 65% was located outside of the United States.

Gross debtat the end of the quarter was $5.7 billion. During Q3 FY18, we prepaid principal amounts of $630 million as part of our plan to deleverage our balance sheet.

A schedule of the dilutive impact from our convertible debt is available on ourInvestor Relations website.

Non-GAAP deferred revenue, adjusted for acquisitions and divestitures

Enterprise Security			Consumer Digital Safety			Total
(In millions)	Q3FY18	Q2FY18	Q3FY17	Q3FY8	Q2FY18	Q3FY17	Q3FY18	Q2FY18	Q3FY17
GAAP TotalPurchase Accounting Veritas LifeLock WSS & PKI	$1,68555 (39) - -	$1,48468 (48) - -	$1,654137 (103) - (303)	$1,045 1 - - -	$1,030 12 - - -	$819- - 181 -	$2,73056 (39) - -	$2,51480 (48) - -	$2,473137 (103) 181 (303)
Non-GAAP Total	$1,701	$1,504	$1,385	$1,046	$1,042	$1,000	$2,747	$2,546	$2,385
Non-GAAP ST Non-GAAP LT	1,153 548	1,059 445	1,065 320	1,005 41	999 43	950 50	2,158 589	2,058 488	2,015 370

Non-GAAP adjusted deferred revenue excludes deferred revenue balances for Q3 FY17 related to our WSS & PKI products to reflect the impact of the divestiture. In addition, our non-GAAP deferred revenue balances for Q3 FY17 includes LifeLock's pre-acquisition deferred revenue for comparative purposes. The Q2 FY18 deferred revenue balance related to WSS & PKI products was included in assets held for sale and, therefore, not reflected in GAAP deferred revenues.

Tax Reform Impact analysis

The Tax Cuts and Jobs Act was enacted in December 2017 and impacted the Q3FY18 tax provision as follows:

• oU.S. statutory tax rate reduced from 35% to 21%, effective January 1, 2018

• oRevised FY18 blended US statutory tax rate of 31.6%

• oCatch up adjustment for new statutory rate resulting in a year to date effective tax rate of 26.8% for Q3

• oOne-time impact of tax reform:

Remeasurement of accrued deferred taxes on foreign earnings	$	(1,415)M
Other deferred tax adjustments	$	(216)M
One-time transition tax liability(1)	$	821 M
Net impact (benefit)	$	(810)M
(1)	Our transition tax liability on accumulated foreign profits is payable over 8 years.
2

OUTLOOK

Our outlook is based on a number of assumptions that management believes are reasonable at the time of this commentary. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in our filings with the Securities and Exchange Commission.

Our Q4 FY18 outlook incorporates the following assumptions:

• oA basket of currencies including EUR/USD exchange rate of $1.19/€

• oNon-GAAP net interest expense and other income of $38 million which excludes amortization of discounts and issuance costs of $10 million

• oNon-GAAP effective tax rate of 26.8%

• oNon-GAAP fully diluted share count of 680 million

Our FY18 outlook incorporates the following assumptions:

• oNon-GAAP net interest expense and other income of $197 million which excludes amortization of discounts and issuance costs of $51 million

• oNon-GAAP effective tax rate of 26.8%

• oNon-GAAP fully diluted share count of 669 million

Dilutive shares related to our convertible debt included in our share count for our Q4 FY18 and FY18 are based on our average share price for the first 10 trading days of Q4.

Below are additional metrics for modeling purposes.

Q4 FY18

We expect the following results of operations for the periods indicated.

Non-GAAP Revenue Guidance for Q4 FY18 - Adjusted for FX

(In millions, except for percentages)	Revenue	Y/Y Change	FX Adjusted Y/Y Change
Total	$1,175 - $1,205	0% - 2%	(2%) - 0%
Enterprise Security	$575 - $595	(17%) - (14%)	(19%) - (16%)
Consumer Digital Safety	$600 - $610	23% - 25%	21% - 23%

Q4 FY18 percentage changes compared to the prior year comparable period are not adjusted for acquisitions and divestiture.

Fiscal 2018

Non-GAAP Revenue Guidance for FY18 - Adjusted for FX

(In millions, except for percentages)	Revenue	Y/Y Change	FX Adjusted Y/Y Change
Total	$4,915 - $4,945	18% - 19%	17% - 18%
Enterprise Security	$2,585 - $2,605	5%	3% - 4%
Consumer Digital Safety	$2,330 - $2,340	38%	37% - 38%

FY18 percentage changes compared to the prior year comparable period are not adjusted for acquisitions and divestiture.

Definitions

Organic growth:Defined as revenue adjusted for the deferred revenue fair value adjustment, foreign exchange impact, and revenue from our WSS & PKI products divided by the year ago revenue adjusted for the deferred revenue fair value adjustment, revenue from the acquired companies, and revenue from our WSS & PKI products.

Consumer Digital Safety Direct Customer Count: Consumers who have a direct billing relationship with Symantec, including online acquisition and retention, affiliates, co-marketing, and OEM channels, but excluding retail and other partners.

Consumer Digital Safety Direct Average Revenue Per User (ARPU): Total non-GAAP revenue from direct customers divided by the average Consumer Digital Safety Direct Customer Count for the period, expressed as a monthly figure.

Consumer Digital Safety Partner Revenue: Non-GAAP revenue generated through billing relationships with partners. Examples are retailers, service providers, and corporations who often purchase on behalf of their end customers or employees.

Forward Looking Statements:

This commentary contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws, including the information contained under the caption "Outlook" and the statements regarding Symantec's other projected financial and business results, including demand for its products and services, Symantec's enhanced capabilities, and Symantec's continued cost and operating efficiencies. 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 commentary. Such risk factors include those related to: our ability to continue to integrate and fully achieve the expected benefits from acquired businesses; general economic conditions; fluctuations and volatility in Symantec's stock price; the ability of Symantec to successfully execute strategic plans; the ability to maintain customer and partner relationships; the ability of Symantec to achieve its cost and operating efficiency goals; the anticipated growth of certain market segments; Symantec's sales pipeline and business strategy; fluctuations in tax rates and foreign currency exchange rates and the impact of the recently enacted tax reform legislation; the impact related to Symantec's future adoption of the new revenue and other accounting standards; the timing and market acceptance of new product releases and upgrades; and the successful development of new products and the degree to which these products gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this commentary. Symantec assumes no obligation, and does not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec's Form 10-K for the fiscal year ended March 31, 2017, filed with the SEC on May 19, 2017 and Symantec's Form 10-Q for the fiscal period ended December 29, 2017 expected to be filed with the SEC on February 2, 2018.

Use of GAAP and Non-GAAP Financial Information:

To assist our readers understand our past financial performance and our projected 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 measures is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. We believe our presentation of non-GAAP financialmeasures, when taken together with corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company's operating performance. Our management team uses these non-GAAP financial measures in assessing our operating results, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of our performance to prior periods and that investors benefit from an understanding of the non-GAAP financial measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP.

Readers are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results which can be found, along with other financial information, on the investor relations page ofour website at:http://www.symantec.com/invest.