UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

(Mark One)

Commission File Number 0-17781

SYMANTEC CORPORATION

Registrant’s telephone number, including area code: (408) 517-8000

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share, and Related Stock Purchase Rights
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filer pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

Aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of Symantec common stock on October 3, 2003 as reported on the Nasdaq National Market:

$ 10,059,568,000

Number of shares outstanding of the registrant’s common stock as of May 28, 2004:

311,834,597

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement, to be delivered to stockholders in connection with our Annual Meeting of Stockholders for 2004, are incorporated by reference into Part III.

SYMANTEC CORPORATION
FORM 10-K
For the Fiscal Year Ended April 2, 2004
Table of Contents

“Symantec,” “we,” “us,” and “our” refer to Symantec Corporation and all of its subsidiaries. This document contains references to trademarks and trade names of other companies.

Forward-Looking Statements and Factors That May Affect Future Results

The discussion following below and throughout this report contains forward-looking statements, which are subject to safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” and similar expressions identify forward-looking statements. In addition, statements that refer to projections of our future financial performance, anticipated growth and trends in our businesses, 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. We cannot guarantee future results, performance or achievements or that predictions or current expectations will 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 under Business Risk Factors beginning on page 30. We encourage you to read that section carefully.

PART I

Item 1: Business

Introduction

Symantec is the global leader in information security providing a broad range of software, appliances and services designed to help individuals, small and mid-sized businesses, and large enterprises secure and manage their IT infrastructure. Symantec’s Norton brand of products is the worldwide leader in consumer security and problem-solving solutions. Founded in 1982, we have offices in 38 countries worldwide.

We file registration statements, periodic and current reports, proxy statements and other materials with the Securities and Exchange Commission. You may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a web site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including our filings.

Our Internet address is www.symantec.com. We make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 through our Investor Relations web site, located at www.symantec.com/invest/index.html, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. The contents of our website are not incorporated into, or otherwise to be regarded as a part of, this Annual Report on Form 10-K.

Business Overview

We currently view our business in five operating segments: Consumer Products, Enterprise Security, Enterprise Administration, Services and Other. For financial information related to our operating segments, see Note 16 of the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.

Consumer Products

Our Consumer Products segment focuses on delivering our Internet security and problem-solving products to individual users, home offices and small businesses. Symantec’s Norton brand of consumer security products is a market leader in desktop protection, with integrated products that work seamlessly to protect customers’ computers from virus outbreaks or malicious hacker attacks. Most of the products that we are currently marketing or developing feature LiveUpdate™. This feature enables users to easily download security updates including virus definitions, firewall rules, URL databases and uninstall scripts. Our consumer products run primarily on Windows® and Macintosh® operating systems. Our Consumer Products segment represented 47%, 41% and 35% of net revenues during fiscal 2004, 2003 and 2002, respectively. Product offerings in the Consumer Products segment include Norton AntiVirus™, Norton Internet Security™ and Norton SystemWorks™.

2

Enterprise Security

Our Enterprise Security segment provides best-of-breed security solutions for all tiers of a network: at the gateways between the network and the outside world, at the servers that act as the network’s vital organs, and at end-user devices including desktop PCs, laptops and handhelds. Our comprehensive solutions include virus protection and content filtering, firewall and virtual private networking, or VPN, intrusion prevention, and security management. In addition, we have expanded our technology offerings to include integrated solutions at the gateway and client levels, which combine several of our individual technology solutions, and early warning solutions. At the gateway level, our products run on Windows NT ®, Solaris®, and Linux® platforms. Our products at the server level operate on Windows NT, UNIX, Linux and other key server platforms. At the client level, our products run on the Windows platform. Our Enterprise Security segment represented 39%, 42% and 42% of net revenues during fiscal 2004, 2003, and 2002, respectively.

Antivirus

Our virus protection and content filtering technologies provide protection at the gateway, server, and client tiers against known and unknown threats. Users of our virus protection and filtering products are able to take action to protect their enterprise from risks associated with using Internet resources. This includes scanning or monitoring data that enters, leaves or travels inside the organization, as well as detecting and eliminating malicious code that may be introduced into a company’s network. Products and services providing protection from virus attacks represent the most well-known and largest market component of the enterprise security area. Product offerings include Symantec AntiVirus™ and Symantec AntiVirus™ Scan Engine.

Integrated Solutions

An integrated solution combines multiple security technologies with management, customer service and support, and advance research. Integrated solutions are designed to work together as a unified system, providing better overall protection, quicker response and more efficient management. Product offerings include Symantec™ Gateway Security and Symantec™ Client Security.

Firewalls

Firewalls provide protection against unwanted intrusion while enabling the flow of approved traffic. VPN solutions are designed to enable employees and business partners to remotely access an enterprise network in a secure, cost effective manner. We offer firewall and VPN solutions that protect throughout the network, including at Internet gateways, gateways to sensitive internal networks and at client devices. Product offerings include Symantec™ Enterprise Firewall with VPN, Symantec™ Firewall/VPN Appliance, and Symantec™ Clientless VPN Appliance.

Management

At the gateway and server level, our policy compliance management solutions help customers define, manage, and enforce policies from a central location as well as probe for network vulnerabilities and suggest remedies to proactively reduce business risk. The initial step to reduce corporate risk is to effectively measure compliance to a business’ security policy and detect vulnerabilities where critical information resides.

Symantec security management products provide a comprehensive solution allowing for the consolidation of security events, the containment of security threats and the centralization of security policy enforcement. These products are built on an open, interoperable framework that enables us to work together with third party solutions to provide secure, manageable, and scalable enterprise security. Product offerings include Symantec Enterprise Security Manager™, Symantec™ Event Manager and Symantec™ Incident Manager.

Early Warning Solutions

Symantec’s early warning solutions provide organizations with customized and comprehensive notifications of cyber attacks worldwide, with countermeasures to prevent attacks before they occur, enabling them to mitigate risk and manage threats. These solutions are supported by Symantec™ Security Response, our Internet security research and support organization. Product offerings include Symantec DeepSight™ Alert Services and Symantec DeepSight™ Threat Management System.

Intrusion Detection

Organizations must protect information from unwanted users and hackers and control access to information to maintain business integrity. At the gateway and server level, our intrusion detection products monitor systems for patterns of misuse and abuse and can warn organizations before systems are misused or information is stolen. Product offerings include Symantec ManHunt™, Symantec Intruder Alert™ and Symantec™ Decoy Server.

3

Enterprise Administration

Our Enterprise Administration segment offers open and modular products and services that enable companies to effectively and efficiently manage their IT infrastructures. Our solutions are used to optimize the security and availability of our customers’ information, while reducing operational costs, increasing IT quality of service, reducing complexity, and enhancing our customers’ ability to rapidly respond to constant business and technological change. This is typically accomplished by transforming existing manual IT processes into automated and unattended operations that can be performed on multiple systems simultaneously across the enterprise, in a dynamic and adaptive manner.

Our solutions allow customers to manage virtually any function at any point in the lifecycle of their computing systems and devices, from network auto-discovery and IT asset management, to operating system provisioning and application deployment, ongoing security updates and configuration management, rapid backup and disaster recovery, de-provisioning, and Help Desk remote control. Our Enterprise Administration segment represented 12%, 15% and 21% of net revenues during fiscal 2004, 2003 and 2002, respectively. Product offerings include Symantec Ghost™ Enterprise Edition, pcAnywhere™, the ON iCommand™ product family, V2i Protector™, PartitionMagic™ Pro, VolumeManager™, ServerMagic™ for NetWare® and OEM Factory Solutions.

Services

Our Services segment provides information security solutions that incorporate advanced technology, security best practices and expertise and global resources to help enable e-business success. Through its comprehensive offerings, our Services segment delivers holistic security assessments, planning and implementation, proactive solutions for security management and response and knowledge transfer to develop internal security skills. Our Services segment represented 2%, 2% and 1% of net revenues during fiscal 2004, 2003 and 2002, respectively. Services offerings include Symantec™ Managed Security Services, Symantec™ Consulting Services and Symantec™ Education Services.

Other

Our Other segment is comprised of sunset products, products nearing the end of their life cycle.

Sales, Marketing and Customers

In addition to our direct sales force, we license our enterprise and consumer products through our distributor, corporate reseller, value-added reseller and system integrator channels.

We sell our consumer products to individuals and small offices/home offices around the world through a multi-tiered distribution network. Our products are available to customers through channels that include: distributors, retailers, direct marketers, Internet-based resellers, original equipment manufacturers, educational institutions and Internet service providers. We also sell some of our products and product upgrades through direct mail/e-mail and over the Internet, in conjunction with channel partners.

We maintain distribution relationships with major independent distributors. Our indirect sales force works closely with our major distributor and reseller accounts to manage the flow of orders, inventory levels and sales to customers. We also work closely with them to execute channel marketing promotions and other cooperative marketing activities.

Our agreements with distributors are generally nonexclusive and may be terminated by either party at any time without cause. These distributors are not within our control and are not obligated to purchase products from us. They also distribute other vendors’ product lines.

In fiscal 2004, three customers accounted for more than 10% of our total net revenues. In fiscal 2003 and 2002, two customers accounted for more than 10% of our total net revenues.

Our marketing activities include:

•		advertising in consumer, trade, technical and business publications;
•		on-line advertising;
•		radio broadcast advertising;
•		public relations;
•		production of brochures, sales tools, multi-media product demonstrations, packaging and other collateral;
•		targeted customer communications through the Symantec web site, including regularly scheduled web-based seminars and online newsletters;

4

•		cooperative marketing with distributors, resellers and industry partners;
•		direct mailings and e-mailings to existing end-users and prospects;
•		the use of tools such as trialware and Symantec™ Security Check, a web-based tool for users to assess the security vulnerabilities on their computers (consumer only);
•		participation in focused trade and computer shows, sponsorship of industry analyst conferences, and execution of Symantec road shows, seminars and user group conferences; and
•		primary market research to understand evolving customer needs and buying behaviors.

For our consumer products, we typically offer two types of rebate programs within most countries: volume incentive rebates to channel partners and promotional rebates to end-users. The distributor or reseller earns a volume incentive rebate primarily based upon their sale of products to end-users. From time to time, we also make rebates available to individual users of various products acquired through major retailers. We regularly offer upgrade rebates to existing customers purchasing a new version of a product. Both volume incentive rebates and end-user rebates are accrued as an offset to revenue when revenue is originally recorded.

International Sales

Revenues from sales outside of the United States represented 52%, 49% and 47% of our net revenues during fiscal 2004, 2003 and 2002, respectively. Our international revenues consisted of sales primarily in the Europe, Middle East and Africa, or EMEA, region and sales from this region represented 33%, 30% and 27% of our net revenues during fiscal 2004, 2003 and 2002, respectively. Additional financial information regarding our international sales is provided in Note 16 of the Notes to Consolidated Financial Statements.

The majority of our net revenues from EMEA are derived from sales by affiliates of our major United States distributors. Additionally, we sell our products through authorized distributors, which may be restricted to specified territories. For most of our consumer products, we translate the documentation, software and packaging into the local language and prepare marketing programs for each local market.

We have marketing offices in Australia, Austria, Belgium, Brazil, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, United Arab Emirates and the United Kingdom. These local offices facilitate our marketing and distribution in international markets. Our international operations are subject to various risks common to international operations, including but not restricted to:

•		government regulations;
•		export and import restrictions;
•		currency fluctuations;
•		repatriation restrictions; and
•		in some jurisdictions, reduced protection for our copyrights and trademarks.

Symantec Security Response

Symantec Security Response is a team of dedicated intrusion experts, security engineers, virus hunters and global technical support teams that work in tandem to provide extensive coverage for enterprises and consumers. Symantec Security Response provides customers with comprehensive, global, 24x7 Internet security expertise to guard against today’s blended Internet threats, which are threats that are multi-faceted in their operating methods and effects.

Symantec Security Response addresses blended threats by providing a thorough analysis of Internet security threats, evaluating how threats work together, then offering recommendations on protection. This allows us to respond to complex security threats in a more holistic, preventive manner. A Symantec Security Response analysis can show how multiple threats work together, how this could impact a customer, and how to protect against these threats.

Symantec Security Response delivers knowledgeable, proactive security protection through product security policies and best practice guidelines that can be updated and distributed through automated processes. Additionally, Symantec Security Response provides rapid reactive security protection through its incident response program, including emergency security signatures and policies, as well as outbound communications such as alerting services.

Symantec Security Response not only provides time-sensitive security advisories using web updates, but also provides alerting services, technical support and media alerts. Symantec Security Response is committed to educating the general public about key security threats and trends through published white papers and speaking engagements worldwide.

Research Centers

5

The research centers for Symantec Security Response are focused on collecting and analyzing the latest malware threats, from network security threats and vulnerabilities to viruses and worms. When a new threat or vulnerability is discovered, Symantec Security Response experts provide rapid emergency response, focusing on communication with customers and delivery of security updates for our security products. Research centers are located around the world, including the United States, Asia Pacific and Europe.

To ensure that customers are utilizing the most recent technologies available for addressing security issues, Symantec Security Response experts leverage our sophisticated back-end product architecture. This architecture allows users to receive the latest security updates—including intrusion detection signatures and virus definitions—automatically in the event of a new security threat or outbreak. LiveUpdate technology simplifies and speeds the process of receiving and implementing security updates for our security product offerings at the server, gateway and desktop levels.

Technical Support

With more than 300 experts in Internet security, desktop and network management, our global technical support team is available around the clock. Our technical support experts provide customers with information on product implementation and usage, as well as countermeasures and identification tools for new threats.

We maintain centralized support facilities throughout the world to drive rapid response to complex queries. Support is available in multiple languages, including Dutch, English, French, German, Italian, Japanese, Korean, Mandarin, Portuguese and Spanish.

Enterprise Security Support

Our enterprise security support program offers annual support contracts to enterprise customers worldwide. Our standard annual support contracts provide 1) unlimited hot-line service delivered by telephone, fax, e-mail and over the Internet; 2) immediate patches for severe problems; 3) periodic software updates; 4) access to our technical knowledge base and FAQ facility; and 5) an invitation to the annual user group meeting. Inclusive in these standard annual support contracts are virus definitions and intrusion detection signatures created by Symantec Security Response. Customers may augment their standard annual support contract with services such as 24x7 telephone and web support, advanced alerting services, additional designated callers (contacts) and additional language support, as well as a Technical Account Manager, assigned to work closely with an organization and act as a focal point for all issues.

Consumer Product Support

Our consumer product support program provides free self-help online services to all consumer customers worldwide, as well as free e-mail support. A team of product experts, editors and language translators are dedicated to maintaining the robustness of the online knowledge base. Generally, telephone product support is provided for a fee. For customers that subscribe to them, the latest virus definitions and application bug fixes and/or patches for most of our currently marketed and developed products are downloaded automatically through LiveUpdate, created by Symantec Security Response.

We revise these fee-based support programs from time to time as customer requirements change and as market trends dictate. These programs may vary slightly by region.

Recent Acquisitions and Divestitures

Acquisitions

Since our initial public offering on June 23, 1989, we have completed acquisitions of 33 businesses. Our recent acquisitions included:

•		ON Technology Corp. in the March 2004 quarter;
•		PowerQuest, Inc. and SafeWeb, Inc. in the December 2003 quarter;
•		Nexland, Inc. in the September 2003 quarter;
•		Riptech, Inc., Recourse Technologies, Inc., SecurityFocus, Inc., and Mountain Wave, Inc. in the September 2002 quarter; and
•		Lindner & Pelc Consult GmbH and Foster-Melliar Limited’s enterprise security management division in the September 2001 quarter.

We accounted for each of these acquisitions as a business purchase and, accordingly, we have included the operating results of these businesses in our consolidated financial statements from their respective dates of acquisition. See Note 3 of the Notes to Consolidated Financial Statements for further discussion of the above acquisitions. We also have acquired several other

6

businesses in the past, including Peter Norton Computing, Inc. on August 31, 1990. We continue to use the Norton brand name for certain consumer products developed and marketed by us.

In April 2003, we purchased certain assets related to Roxio Inc.’s GoBack^TM computer recovery software business. In addition, in August 2003, we purchased a security technology patent as part of a legal settlement in Hilgraeve, Inc. v. Symantec Corporation.

Divestitures

In August 2001, we sold assets and transferred liabilities and employees related to our Web Access Management product line to PassGo Technologies, Ltd. and agreed to license them the related technology for a period of four years through August 2005. In December 1999, we licensed substantially all of the ACT! Product line technology to Interact Commerce Corporation for a period of four years through December 2003.

For further discussion on our recent acquisitions and divestitures, see Note 3 of the Notes to Consolidated Financial Statements.

Product Development, Partnerships, Investments and Acquisitions

We use a multiple product sourcing strategy that includes:

•		internal development;
•		licensing from third parties;
•		investment in companies; and
•		acquisitions of technologies, product lines or companies.

We develop software products that are designed to operate on a variety of operating systems. We typically develop new products and enhancements of existing products through focused product development groups. Each product development group is responsible for its own design, development, documentation and quality assurance. Our research and development expenditures for each of the last three years are further discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Research and Development Expenses”.

Independent contractors are used for aspects of the product development process. In addition, elements of some of our products are licensed from third parties.

We invest in companies with emerging technologies and companies that promote the sale and use of our products and services. These investments are made in lieu of an acquisition when timing is inappropriate or when the business models and sectors fall out of our strategic requirements. We pursue investments, which we believe will be complementary and can enhance both financial returns and market growth.

We use strategic acquisitions as necessary to provide certain technology, people and products for our overall product and services strategy. We consider both time to market and potential market share growth when evaluating acquisitions of technologies, product lines or companies. We have completed a number of acquisitions of technologies, companies and products in the past, and have also disposed of technologies and products. We may acquire and/or dispose of other technologies, companies and products in the future. For further discussion on our acquisitions and divestitures, see Note 3 of the Notes to Consolidated Financial Statements.

Competition

Our markets are competitive and are subject to rapid changes in technology. They are influenced by the constant change in Internet security threats and the strategic direction of major software and operating system providers, network equipment and computer hardware manufacturers, Internet service providers, application service providers and key application software vendors. Our competitiveness depends on our ability to deliver products that meet our customers’ needs by enhancing our existing solutions and services and offering reliable, scalable and standardized new solutions on a timely basis. We have limited resources, and as a result, we must deploy our available resources thoughtfully. The principal competitive factors in our Consumer Products, Enterprise Security and Enterprise Administration segments are quality, employment of the most advanced technology, time to market, price, reputation, financial stability, breadth of product offerings, customer support, brand recognition, and sales and marketing teams. In our Services segment, the principal competitive factors include technical capability, customer responsiveness, price, ability to attract and retain talented and experienced personnel, financial stability, and reputation within the industry.

In the enterprise security and administration markets, we compete against many companies who offer competing products to our technology solutions and competing services to our response and support. In the area of antivirus and filtering products, some of the companies we compete against are Computer Associates, McAfee Security (formerly Network Associates), Sophos, Trend Micro, and WebSense. In addition, Microsoft has announced its intent to offer Service Pack 2, which checks for active and current anti-virus software on desktops and refers the user to software vendors. In the area of firewall and

7

VPN, some of the companies we compete against are Check Point Software, Cisco, Juniper, SonicWALL and Watchguard. In the area of intrusion detection and security management, some of the companies we compete against are Bindview, Internet Security Services, NetIQ and Tipping Point. In the areas of remote management, imaging provisioning, backup, recovery and asset management, some of the companies we compete against are Altiris, Laplink, Marimba and Veritas. In addition, we face indirect or potential competition from operating system providers and network equipment and computer hardware manufacturers, who provide or may provide various security solutions and functions in their current and future products. These competitors have significant advantages due to their ability to influence or control the computing platforms, security layers and network tiers on, or in, which security products operate. In addition, these competitors generally have significantly greater financial, marketing or technological resources than we do. We believe that our ability to compete in the enterprise security and administration markets going forward depends in part on providing simplified, solution-oriented offerings that address multiple aspects of enterprise security.

Some of the companies that offer competing products to our Consumer Products offerings include Check Point Software, Internet Security Services, Kroll, McAfee Security (formerly Network Associates), Norman, Panda and Trend Micro. With the recent outbreaks of viruses and other Internet-based security threats, several other companies have entered the market and may become significant competitors in the future.

Our Enterprise Security Services compete with companies such as Counterpane, IBM, Internet Security Services, Ubizen and Verisign.

Price competition is intense with most of our products and services. We expect price competition to continue to increase and become even more significant in the future, which may reduce our profit margins.

We also face competition from a number of other products that offer levels of functionality different from those offered by our products, or that were designed for a somewhat different group of end-users than those targeted by us. Microsoft has added security features to new versions of its operating system products that provide some of the same functions offered in our products. Microsoft’s acquisition of GeCad’s antivirus technology could lead it to include antivirus functions in future versions of its operating system products. In addition, vendors of other operating systems, such as Red Hat® Linux, Solaris and Unix-based operating systems, may also incorporate some of the advanced utilities or other functionality offered in our products. While we plan to continue to improve our products with a view toward providing enhanced functionality over that provided in current and future operating systems, these efforts may be unsuccessful and any improved products may not be commercially accepted by users. We will also continue to attempt to cooperate with operating system vendors to make our products compatible with those operating systems, while at the same time, differentiating our utility products from features included in those operating systems. Our efforts in this regard may be unsuccessful.

The demand for some of our products, including those currently under development, may decrease if, among other reasons:

•		Microsoft includes additional product features in future releases of Windows;
•		hardware vendors, including Cisco, incorporate additional server-based network management and security tools into network operating systems;
•		Microsoft, network equipment or computer hardware manufacturers license, develop or acquire technology or products that provide functionality directly competitive with our product and service offerings.

In addition, we compete with other computer software companies, operating system providers and network equipment and computer hardware manufacturers for access to retail distribution channels and for the attention of customers at the retail level and in corporate accounts. We also compete with other software companies, operating system providers and network equipment and computer hardware manufacturers to acquire products or companies and to publish software developed by third parties.

Some of our existing and potential competitors have greater financial, marketing or technological resources than we do. We believe that competition in the industry will continue to intensify as other major software companies expand their product lines into additional product categories, and as operating system providers, network equipment and computer hardware manufacturers attempt to leverage their strengths at the computing platform, security layer and network tier to compete more aggressively in the market for security solutions.

Manufacturing

Our product development groups produce a set of master CD-ROMs or diskettes and documentation for each product that is then duplicated or replicated and packaged into products by our logistics organization. United States purchasing of all raw materials is done by an outside organization. This outside contractor, under the supervision of our domestic logistics organization, performs all of our domestic manufacturing and order fulfillment. The manufacturing steps that are

8

subcontracted to outside organizations include the replication of CD-ROMs, printing of documentation materials and retail boxes, and assembly of the final packages. Purchasing is done by Symantec personnel for products manufactured in our Dublin, Ireland facilities. For most products distributed outside of North and South America, our Dublin, Ireland manufacturing facility performs diskette duplication, assembly of the final packages, and order fulfillment. Our Dublin, Ireland manufacturing facility also subcontracts to outside organizations for the replication of CD-ROMs and printing of documentation materials and retail boxes.

Intellectual Property

We regard our software as proprietary. We attempt to protect our software technology by relying on a combination of copyright, patent, trade secret and trademark laws, restrictions on disclosure and other methods. In particular, we have a substantial number of registered trademarks and currently hold a substantial number of patents in the United States, as well as patent holdings in other countries, which expire at various times over the next twenty years. We regularly file other applications for patents and trademarks in order to protect proprietary intellectual property that we believe are important to our business. We also license some intellectual property from third parties for use in our products.

We face a number of risks relating to our intellectual property, including unauthorized use and unauthorized copying, or piracy, of our software solutions. Litigation may be necessary to enforce our intellectual property rights, to protect trade secrets or trademarks or to determine the validity and scope of the proprietary rights of others. Patents that have been issued to us could be determined to be invalid and may not be enforceable against competitive products in every jurisdiction. Furthermore, other parties have asserted and may, in the future, assert infringement claims against us. For further discussion on our current litigation, see Note 15 of the Notes to Consolidated Financial Statements. These claims and any litigation may result in invalidation of our proprietary rights. Litigation, even if not meritorious, could result in substantial costs and diversion of resources and management attention. In addition, third party licenses may not continue to be available to us on commercially acceptable terms, or at all.

Employees

As of March 31, 2004, we employed approximately 5,300 people worldwide, including approximately 2,800 in sales, marketing and related staff activities (with approximately 800 employees in our direct sales force), 1,300 in product development, 300 in services and 900 in management, manufacturing, administration and finance. In connection with the relocation of our Leiden, Netherlands operations to Dublin, Ireland in early fiscal year 2003, a group of employees in the Leiden facility joined a union to negotiate the proposed terms of the transfer of operations to our Dublin facility, focusing primarily on severance benefits for employees that did not relocate to Dublin. Except for these terminated employees, no other employees are represented by a labor union. We believe that relations with our employees are good.

9

Item 2: Properties

Our principal locations are as follows:

10

North America

In addition to the above properties, we lease 25 properties in North America (principally in the United States) for which the square footage is individually insignificant, but which total 195,000 square feet in the aggregate. Of the properties we own and lease in North America, we are attempting to sublease facilities of approximately 167,000 square feet while facilities of approximately 248,000 square feet are subleased to third parties. We are currently building a facility in Culver City, which we expect to occupy in 2007. In addition, with the acquisition of ON Technology, we expect to consolidate our Waltham, Massachusetts site and the site acquired through ON Technology into one main site. We expect this to be finalized during fiscal 2005.

In March 2003, we terminated our operating lease obligations for four facilities located in Springfield, Oregon, Newport News, Virginia and two in Cupertino, California by purchasing the land and buildings for $124 million.

International

In addition to the above properties, we lease 58 properties outside of North America (principally in Europe) for which the square footage is individually insignificant, but which total 364,000 square feet in the aggregate. Of the properties we own and lease in EMEA, we are attempting to sublease facilities of approximately 32,000 square feet while facilities of approximately 16,000 square feet are subleased to third parties.

We believe that our existing facilities are adequate for current needs and that the productive capacity in such facilities is substantially being utilized.

Item 3: Legal Proceedings

Information with respect to this Item may be found in Note 15 of the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K, which information is incorporated into this Item 3 by reference.

Item 4: Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of the security holders during the fourth quarter of fiscal 2004.

11

PART II

Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the Nasdaq National Market under the Nasdaq symbol “SYMC.” The high and low sales prices set forth below are as reported on the Nasdaq National Market. All sales prices have been adjusted to reflect the two-for-one stock split, effected as a stock dividend, that became effective November 19, 2003.

As of March 31, 2004, there were 773 stockholders of record of Symantec common stock.

We have not paid cash dividends in the last two fiscal years. We presently intend to retain future earnings, if any, for use in our business, and, therefore, we do not anticipate paying any cash dividends on our capital stock in the foreseeable future.

Stock repurchases during fiscal 2004 were as follows:

On January 16, 2001, the Board of Directors replaced an earlier stock repurchase program with a new authorization to repurchase up to $700 million of Symantec common stock, not to exceed 60.0 million shares, with no expiration date. On January 20, 2004, the Board of Directors increased the dollar amount of the company’s authorized stock repurchase program from $700 million to $940 million, without any specific limit on the number of shares to be repurchased. In connection with the additional $240 million authorization, we adopted a repurchase plan under Rule 10b5-1 and intend to repurchase $60 million of shares during each calendar 2004 quarter.

During fiscal 2004, we repurchased 1.5 million shares under the amended stock repurchase program, at prices ranging from $39.03 to $41.63 per share, for an aggregate amount of $60 million. During fiscal 2003, we repurchased 4.4 million shares at prices ranging from $13.97 to $14.98 per share, for an aggregate amount of $64 million. During fiscal 2002, we repurchased 19.3 million shares at prices ranging from $8.89 to $12.25 per share, for an aggregate amount of $204 million. As of March 31, 2004, $367 million remained authorized for future repurchases, of which $180 million is expected to be utilized through the 10b5-1 plan through December 2004.

12

Item 6: Selected Financial Data

The following selected financial data is qualified in its entirety by and should be read in conjunction with the more detailed consolidated financial statements and related notes included elsewhere herein. Historical results may not be indicative of future results.

During the past five fiscal years, we have made the following business acquisitions:

•		Nexland, Inc., PowerQuest, Inc., Safeweb, Inc., and ON Technology Corp. during fiscal 2004;
•		Riptech, Inc., Recourse Technologies, Inc., SecurityFocus, Inc. and Mountain Wave, Inc. during fiscal 2003;
•		Lindner & Pelc Consult GmbH and Foster-Melliar Limited’s enterprise security management division during fiscal 2002;
•		AXENT Technologies during fiscal 2001; and
•		20/20 Software, L-3 Network Security’s operations and URLabs during fiscal 2000.

Each of these acquisitions was accounted for as a business purchase and, accordingly, the operating results of these businesses have been included in our consolidated financial statements since their respective dates of acquisition.

On August 24, 2001, we divested our Web Access Management product line. On December 31, 1999, we divested our Visual Café™ and
ACT!™ Product lines.

Five-Year Summary

(a)		Beginning in fiscal 2003, the company no longer amortizes goodwill due to the adoption of a new accounting standard. For more information, see Note 4 of the Notes to Consolidated Financial Statements.
(b)		During fiscal 2004, we recorded patent settlement costs and purchased a security technology patent as part of a settlement in Hilgraeve, Inc. v. Symantec Corporation. For more information, see Note 4 of the Notes to Consolidated Financial Statements.
(c)		During fiscal 2002, we accrued litigation expenses for a copyright action assumed by us as a result of our acquisition of Delrina Corporation. For more information, see Note 15 of the Notes to Consolidated Financial Statements.

13

(d)		In October 2001, we issued $600 million of 3% convertible subordinated notes. For more information, see Note 6 of the Notes to Consolidated Financial Statements.
(e)		During fiscal 2000, we recorded gains of $69 million and $18 million on the divestiture of our Visual Café and ACT! product lines, respectively.
(f)		Share and per share amounts reflect the two-for-one stock splits effected as a stock dividend, which occurred on November 19, 2003 and January 31, 2002.

(g)

A portion of deferred revenue as of March 31, 2003 was reclassified to long-term to conform to current presentation. Amounts prior to fiscal 2003 are considered immaterial for reclassification.

14

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Symantec is the global leader in information security providing a broad range of software, appliances and services designed to help individuals, small and mid-sized businesses, and large enterprises secure and manage their IT infrastructure. Symantec’s Norton brand of products is the worldwide leader in consumer security and problem-solving solutions. Founded in 1982, we have offices in 38 countries worldwide.

We have a 52/53-week fiscal accounting year. Accordingly, all references as of and for the periods ended March 31, 2004, 2003 and 2002 reflect amounts as of and for the periods ended April 2, 2004, March 28, 2003, and March 29, 2002, respectively. The fiscal accounting year ended April 2, 2004, is comprised of 53 weeks of operations while the fiscal accounting years ended March 28, 2003 and March 29, 2002 each is comprised of 52 weeks of operations. The fiscal accounting year ending April 1, 2005 will comprise of 52 weeks of operations.

Critical Accounting Estimates

The preparation of our consolidated financial statements and related notes requires us to make estimates, which include judgments and assumptions, that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We have based our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances and we evaluate our estimates on a regular basis and make changes accordingly. Historically, our estimates relative to our critical accounting estimates have not differed materially from actual results, however actual results may differ from these estimates under different conditions.

A critical accounting estimate is based on judgments and assumptions about matters that are highly uncertain at the time the estimate is made. Different estimates that reasonably could have been used, or changes in accounting estimates could materially impact the financial statements. We believe that the estimates described below represent our critical accounting estimates, as they have the greatest potential impact on our consolidated financial statements. We also refer you to our “Summary of Significant Accounting Policies” beginning on page 52 in this Annual Report on Form 10-K.

Revenue Recognition

We recognize revenue in accordance with generally accepted accounting principles that have been prescribed for the software industry. Revenue recognition requirements in the software industry are very complex and they require us to make many estimates.

In applying our revenue recognition policy, we must determine which portions of our revenue are recognized currently and which portions must be deferred. In order to determine current and deferred revenue, we make estimates with regard to future deliverable products and services and the appropriate pricing for those products and services. Our estimates regarding future products and services could differ from actual events.

We defer revenue relating to products, primarily in our Consumer Products and Enterprise Administration segments, that we have shipped into our distribution and reseller channels to the extent that inventory levels are in excess of certain specified inventory levels for these channels. We defer this revenue as an offset to accounts receivable. We estimate the excess inventory in these channels by analyzing channel inventory levels and distribution and reseller sell-through trends obtained from our channel partners, as well as various historical trends on a product basis. In addition, we consider other factors in assessing these specified inventory levels, such as product seasonality, current market conditions, economic trends, existing security threats and timing of new product releases. On the same basis, we defer the associated cost of revenues related to this deferred revenue. If we made different estimates, material differences may result in the amount and timing of our net revenues and cost of revenues for any period presented.

In arrangements that include multiple elements, including perpetual software licenses and maintenance and/or services, and packaged products with content updates, we allocate and defer revenue for the undelivered items based on vendor-specific objective evidence, or VSOE, of fair value of the undelivered elements, and recognize the difference between the total arrangement fee and the amount deferred for the undelivered items as revenue. Our deferred revenue consists primarily of the unamortized balance of enterprise product maintenance and consumer product content updates and totaled $971 million as of March 31, 2004, of which $92 million was represented as long-term deferred revenue, on the Consolidated Balance Sheet. VSOE of each element is based on the price for

15

which the undelivered element is sold separately. We determine fair value of the undelivered elements based on historical evidence of our stand-alone sales of these elements to third parties. When VSOE does not exist for undelivered items such as maintenance, then the entire arrangement fee is recognized ratably over the performance period. Changes to the elements in a software arrangement, the ability to identify VSOE for those elements, the fair value of the respective elements, and changes to a product’s estimated life cycle could materially impact the amount of earned and unearned revenue.

Reserves for Product Returns

End-users may return our products, primarily within our Consumer Products and Enterprise Administration segments, through distributors and resellers or to us directly for a full refund within a reasonably short period from the date of purchase. Our estimated reserves for such end-user product returns, which are recorded as an offset to revenue, are based primarily on historical trends. We also consider other factors such as the timing of upgrades and new versions of products, current market conditions, economic trends and changes in technology. In addition, we fully reserve for obsolete products in the distribution channels as an offset to revenue. If we made different estimates, material differences may result in the amount and timing of our net revenues for any period presented. More or less product may be returned from what was estimated and/or the amount of inventory in the channel could be different than what is estimated. These factors and unanticipated changes in the economic and industry environment could make our return estimates differ from actual results.

Reserves for Rebates

We estimate and record reserves as an offset to revenue for channel and end-user rebates, related primarily to products within our Consumer Products, Enterprise Security and Enterprise Administration segments. Our estimated reserves for channel volume incentive rebates are based on distributors’ and resellers’ actual performance against the terms and conditions of volume incentive rebate programs, which are typically entered into quarterly. Our reserves for end-user rebates are estimated on the terms and conditions of the promotional programs, actual sales during the promotion, amount of actual redemptions received, historical redemption trends by product and by type of promotional program and the value of the rebate. We also consider current market conditions and economic trends when estimating our reserves for rebates. If we made different estimates, material differences may result in the amount and timing of our net revenues for any period presented.

Business Combinations

When we acquire businesses, we allocate the purchase price to tangible assets and liabilities acquired and identifiable intangible assets. Any residual purchase price is recorded as goodwill. We engage independent third-party appraisal firms to assist in determining the fair values of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates.

At March 31, 2004, goodwill was $1.1 billion, acquired product rights was $121 million, and other identifiable intangible assets was $10 million. We assess the impairment of goodwill within our reportable units annually, or more often if events or changes in circumstances indicate that the carrying value may not be recoverable. We assess the impairment of acquired product rights and other identifiable intangible assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. An impairment loss would be recognized when the sum of the discounted future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Such impairment loss would be measured as the difference between the carrying amount of the asset and its fair value. The estimate of cash flow is based upon, among other things, certain assumptions about expected future operating performance and an appropriate discount rate determined by our management. Our estimates of discounted cash flows may differ from actual cash flows due to, among other things, economic conditions, changes to the business model or changes in operating performance. If we made different estimates, material differences may result in write-downs of net long-lived and intangible assets, which would be reflected by charges to our operating results for any period presented.

Accounting for Excess Facilities

16

We have estimated expenses for excess facilities related to consolidating, moving and relocating various groups or sites as a result of restructuring activities and business acquisitions. In determining our estimates, we obtained information from third party leasing agents to calculate anticipated third party sublease income and the vacancy period prior to finding a sub-lessee. Market conditions will affect our ability to sublease facilities on terms consistent with our estimates. Our ability to sublease facilities on schedule or to negotiate lease terms resulting in higher or lower sublease income than estimated will affect our accrual for site closures. Differences between estimates of related broker commissions, tenant improvements and related exit costs may increase or decrease our accrual upon final negotiation. If we made different estimates regarding these various components of our excess facilities costs, the amount recorded for any period presented could vary materially from those actually recorded.

Income Taxes

We make significant estimates to determine our current provision for income taxes, as well as deferred tax assets and liabilities and our income taxes payable. Our estimates relative to the current provision for income taxes take into account current tax laws, our interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax laws or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in our financial position and results of operations.

We also assess the likelihood that our net deferred tax assets will be realized. Realization of our net deferred tax assets is dependent upon future United States taxable income and future taxable income in certain foreign jurisdictions, as well as our implementation of prudent and feasible tax planning strategies. Our estimates regarding future profitability may change due to future market conditions, changes in United States or international tax laws and other factors. To the extent we believe it is more likely than not that some portion or all of our net deferred tax assets will not be realized, we establish a valuation allowance against the deferred tax assets. To the extent we establish a valuation allowance or change the allowance in a period, we reflect the change with a corresponding increase or decrease to our tax provision in our Consolidated Statements of Operations.

Legal Contingencies

From time to time, we are involved in disputes that arise in the ordinary course of business, and we do not expect this trend to change in the future. We are currently involved in the legal proceedings as discussed in Note 15 of the Notes to Consolidated Financial Statements.

When the likelihood of the incurrence of costs related to our legal proceedings is probable and management has the ability to estimate such costs, we provide for estimates of external legal fees and any probable losses through charges to our Consolidated Statements of Operations. These estimates have been based on our assessment of the facts and circumstances at each balance sheet date and are subject to change based upon new information and intervening events. Our accrual for legal contingencies as of March 31, 2004 represented insignificant amounts related to external legal fees and no amounts were accrued for probable losses, as we believe that we have meritorious defenses to the claims against us, and we will defend ourselves vigorously. However, even if we are successful, estimated costs for external legal fees could be more than anticipated. And, if we are unsuccessful, we might be forced to pay significant damages and licensing fees, or modify our business practices for which we have not accrued any amounts for loss contingencies. Any such results could materially harm our business and could result in a material adverse impact on the financial position, results of operations or cash flows.

17

Results of Operations

Overview

Our goal for fiscal 2004 was to continue serving customer needs while reshaping the competitive landscape by offering integrated solutions.

Within the Consumer Products segment, we grew our base of individual users and accelerated our expansion into the small business market. In addition, we released new versions of our award winning consumer products, including Norton Internet Security, Norton AntiVirus, Norton™ Personal Firewall, Norton AntiSpam™ and Norton SystemWorks, which includes Norton™ Password Manager. These new products provide protection from viruses, intrusion attempts and piracy threats, and offer expanded protection from emerging threats.

Within the Enterprise Security segment, we continued to enhance and expand our product portfolio in order to address the evolving threat environment with the release of our new line of integrated solutions: the Symantec Gateway Security, Symantec Deep Sight Threat Management System, Symantec Enterprise Security Manager, Symantec Incident Manager and Symantec ManHunt. In addition, we maintained our focus on delivering strong integrated solutions, enhanced manageability, and more comprehensive intrusion protection.

Within the Enterprise Administration segment, sales of our pcAnywhere product continued to decline and we expect this trend to continue due to the extended functionality of Microsoft operating system products. Conversely, the Enterprise Administration segment benefited from our new product introductions related to our business acquisitions of ON Technology and PowerQuest in the second half of fiscal 2004.

Net revenue during fiscal 2004 increased as compared to fiscal 2003 due primarily to increased sales of our consumer and enterprise security products, which can be attributable to the numerous security threat outbreaks that occurred during fiscal 2004, including the Beagle, Welchia, Blaster, Sobig, MyDoom and Netsky viruses. In addition, increased demand for our security protection solutions from large organizations as well as from small businesses and consumers also contributed to the growth.

Net revenue during fiscal 2003 increased as compared to fiscal 2002 due primarily to increased sales of our consumer and enterprise security products, which can be attributable to the numerous security threat outbreaks that occurred during fiscal 2003, including the Code Red, Nimda, Klez, Bugbear and Slammer viruses.

From a regional standpoint, sales outside of the United States contributed strongly to revenue growth while sales in the United States also grew during these periods. Strength in major foreign currencies during fiscal 2004 and fiscal 2003 also positively impacted our international revenue growth.

A significant portion of our deferred revenue balance of $590 million as of March 31, 2003 contributed to our total net revenues during fiscal 2004. Deferred revenue increased during fiscal 2004 as compared to fiscal 2003 due primarily to increased maintenance obligations. We anticipate that approximately one-third of our deferred revenue balance of $971 million as of March 31, 2004 will contribute to our net revenues during the June 2004 quarter.

Headcount during fiscal 2004 increased as compared to fiscal 2003 due primarily to the growth of the company and due to business acquisitions. Of this increase, approximately 60% was due to the growth of the company and approximately 40% was due to business acquisitions.

For total operations, net income (loss) was $371 million, $248 million and $(28) million during fiscal year 2004, 2003 and 2002, respectively, or $1.07, $0.77 and $(0.10), respectively, in diluted net income (loss) per share.

During fiscal 2004, we acquired the following businesses and intangible assets:

•		On April 17, 2003, we purchased certain assets related to Roxio Inc.’s GoBack computer recovery software business for $13 million in cash.
•		On July 17, 2003, we completed the acquisition of Nexland, Inc., a technology driven Internet security company whose Internet Protocol based networking appliances are installed at enterprise branches and telecommuter offices worldwide, for $21 million in cash.
•		On August 6, 2003, we purchased a security technology patent as part of a settlement in Hilgraeve, Inc. v. Symantec Corporation for $63 million in cash.
•		On October 15, 2003, we completed the acquisition of SafeWeb, Inc. a provider of SSL VPN appliances, for $27

18

On May 19, 2004, we entered into an agreement to acquire Brightmail, Inc., a developer of e-mail services and software for application service providers, Internet service providers, portals and enterprises, for an estimated $370 million in cash. The acquisition is expected to close in July 2004, subject to the satisfaction of closing conditions.

Information about the various factors that management deems important in contributing to our operating results for fiscal year 2004, 2003 and 2002 is provided in the discussion below.

Net Revenues

Net revenues increased during fiscal 2004 as compared to fiscal 2003 due primarily to an increase of $302 million and $143 million in sales of our consumer and enterprise security products, respectively. The increased sales of these products were due primarily to continuing growth in demand for our consumer security protection products and our enterprise virus protection solutions. We believe that a significant portion of the growth in demand during fiscal 2004 was attributable to the numerous security threat outbreaks that occurred during the year and may not be sustainable.

Net revenues increased during fiscal 2003 as compared to fiscal 2002 due primarily to an increase of $194 million and $139 million in sales of our consumer and enterprise security products, respectively. The increased sales of these products were due primarily to continuing growth in demand for our virus protection solutions from large organizations as well as from small businesses and consumers.

Net Revenues by Segment

Consumer Products

Our Consumer Products segment focuses on delivering our Internet security and problem-solving products to individual users, home offices and small businesses. We believe that a significant portion of the growth during fiscal 2004 was attributable to the numerous security threat outbreaks that occurred in August 2003 and February 2004, and these growth rates may not be sustainable. Our sales through original equipment manufacturers and sales through our electronic distribution channel, including our subscription renewal business, also contributed to the increase in sales during fiscal 2004. These sales grew by $223 million in 2004 as compared to 2003. Specifically, the increase in revenue from our Consumer Products segment during fiscal 2004 as compared to fiscal 2003 was due primarily to increases of $188 million and $129 million in sales of our Norton AntiVirus and Norton Internet Security products, respectively. These increases were offset slightly by a decrease in sales of our other consumer products.

Revenue from our Consumer Products segment increased during fiscal 2003 as compared to fiscal 2002. Our sales through original equipment manufacturers and sales through our electronic distribution channel, including our subscription renewal business, contributed to the increase in sales during fiscal 2003, as we made infrastructure improvements to our online subscription renewal service at the end of fiscal 2002. These sales grew by $154

19

million in 2003 as compared to 2002 as a result of increase volume and prices. Specifically, the increase in revenue from our Consumer Products segment during fiscal 2003 as compared to fiscal 2002 was due primarily to stronger than expected consumer and small business spending, which contributed to the increase in sales of our Norton AntiVirus and Norton Internet Security products in the amount of $124 million and $52 million, respectively.

Enterprise Security

Our Enterprise Security segment provides security solutions for all tiers of a network: at the gateways between the network and the outside world, at the servers that act as the network's vital organs, and at end-user devices, including desktop PCs, laptops and handhelds. Revenue from our Enterprise Security segment increased during fiscal 2004 as compared to fiscal 2003 due primarily to a $131 million increase in sales of our virus protection solutions. Similarly, revenue from our Enterprise Security segment increased during fiscal 2003 as compared to fiscal 2002 due primarily to a $117 million increase in sales of our virus protection solutions.

Enterprise Administration

Our Enterprise Administration segment offers open and modular products and services that enable companies to effectively and efficiently manage their IT infrastructures. Revenue from our Enterprise Administration segment increased during fiscal 2004 as compared to fiscal 2003 due primarily to sales of PowerQuest products of $18 million and sales of ON Technology products of $6 million, after the respective dates of acquisition. These increases were offset by a decrease in sales of our pcAnywhere product of $19 million. Revenue from our Enterprise Administration segment decreased during fiscal 2003 as compared to fiscal 2002 due primarily to a decrease in sales of our pcAnywhere product of $13 million, partially offset by growth in our Ghost Corporate Edition product of $6 million.

Services

Our Services segment provides information security solutions that incorporate advanced technology, security best practices and expertise, and global resources to help enable e-business success. The increase in revenue from our services segment during fiscal 2004 as compared to fiscal 2003 and during fiscal 2003 as compared to fiscal 2002 were due primarily to increased sales from our managed security services, which represented $27 million and $14 million of net revenues during fiscal 2004 and fiscal 2003, respectively. In fiscal 2002, services revenues were mainly comprised of consulting revenue of $8 million.

Other

* Percentage not meaningful

20

Our Other segment is comprised of sunset products and products nearing the end of their life cycle.

Net Revenues by Geographic Region

Net revenues from customers outside of the United States represented approximately 52%, 49% and 47% of net revenues during fiscal year 2004, 2003 and 2002. International net revenues increased during fiscal 2004 as compared to fiscal 2003 due primarily to sales growth of $201 million and $41 million in the Europe, Middle East and Africa, or EMEA, region and Japan, respectively. In addition, international revenues increased due to increased sales of our anti-virus products in our Consumer Products and Enterprise Security segments.

International net revenues increased during fiscal 2003 as compared to fiscal 2002 due primarily to sales growth of $122 million and $27 million in the EMEA region and Japan, respectively. In addition, international net revenues increased due to increased customer awareness related to security threats and due to infrastructure improvements made to our online subscription renewal service at the end of fiscal 2002, whereby consumers are able to download software updates from the Internet.

Strength in major foreign currencies during fiscal 2004, as compared to the average major foreign currency rates during fiscal 2003, positively impacted our international revenue growth by $128 million due primarily to the strength of the Euro. Strength in major foreign currencies during fiscal 2003, as compared to the average major foreign currency rates during fiscal 2002, positively impacted our international revenue growth by $66 million due primarily to the strength of the Euro. We are unable to predict the extent to which revenues in future periods will be impacted by changes in foreign currency rates. If international sales become a greater proportion of our total sales in the future, changes in foreign exchange rates may have a potentially greater impact on our revenues and operating results.

Gross Margin

21

Gross profit represents net revenues less cost of revenues. Cost of revenues consists primarily of costs for producing manuals and CDs, packaging costs, fee-based technical support costs, amortization of acquired product rights, payments to original equipment manufacturers under revenue sharing arrangements, costs of services, royalties paid to third parties under technology licensing agreements, and manufacturing expenses.

Gross margin remained flat at approximately 82% during fiscal year 2004, 2003 and 2002. We anticipate that our services revenues may grow and comprise a higher percentage of our total revenues in future periods, in which case our gross margin would likely decrease, as our services typically have higher cost of revenues than our software products.

Acquired Product Rights

Acquired product rights are comprised of purchased product rights, technologies, databases and revenue — related order backlog and contracts from acquired companies. During fiscal 2004, we recorded $90 million in acquired product rights as follows (in thousands):

During fiscal 2003, we recorded $41 million in acquired product rights as follows (in thousands):

Amortization of acquired product rights was $42 million, $32 million and $32 million in fiscal 2004, 2003 and 2002, respectively. Amortization of acquired product rights was included in Cost of revenues in the Consolidated Statements of Operations, except for an immaterial amount related to the divested Web Access Management product line, which was included in Income, net of expense, from sale of technologies and product lines in the Consolidated Statement of Operations.

For further discussion on acquired product rights and related amortization, see Notes 3 and 4 of the Notes to Consolidated Financial Statements.

Operating Expenses

Research and Development Expenses
 

The increase in research and development expenses in fiscal 2004 as compared to fiscal 2003 and fiscal 2003 as compared to fiscal 2002 was due primarily to increases in employee headcount and related compensation and in overhead costs due to the growth of the company, including business acquisitions, during fiscal 2004 and 2003.

Sales and Marketing Expenses
 

22

The increase in sales and marketing expenses in fiscal 2004 as compared to fiscal 2003 was due primarily to increases in headcount and related compensation and in overhead costs due to the growth of the company, including business acquisitions during fiscal 2004. In addition, we spent more on outside services, advertising and promotion activities during fiscal 2004, as compared to fiscal 2003, as our variable marketing expenses have increased in connection with our growth in revenue. The increase in sales and marketing expenses in fiscal 2003 as compared to fiscal 2002 was primarily related to increases in headcount and related compensation and in overhead costs due to the growth of the company during fiscal 2003, including business acquisitions during fiscal 2003. In addition, we spent more on advertising and promotion expenses in fiscal 2003 as compared to fiscal 2002.

General and Administrative Expenses
 

The increases in general and administrative expenses in fiscal 2004 as compared to fiscal 2003, and fiscal 2003 as compared to fiscal 2002, were due primarily to increases in headcount and related compensation. The increased headcount was the direct result of the growth of the Company, including business acquisitions completed in fiscal 2004 and fiscal 2003.

Amortization of Goodwill

During fiscal 2002, we recorded $197 million of amortization of goodwill. In accordance with SFAS No. 142, the carrying values of goodwill and intangible assets deemed to have indefinite lives are no longer amortized as of April 1, 2002. Therefore, there was no corresponding expense in fiscal 2004 and 2003.

Goodwill is tested for impairment on an annual basis. We completed our annual goodwill impairment required by SFAS No. 142 during the March 2004 quarter and determined that there was no impairment of goodwill. We will continue to test for impairment during the fourth quarter of each year, or earlier if indicators of impairment exist.

Amortization of Other Intangibles from Acquisitions
 

* Percentage not meaningful

The increase in amortization of other intangibles from acquisitions in fiscal 2004 as compared to fiscal 2003 was primarily related to the amortization of other intangible assets acquired with the purchase of ON Technology in February 2004, PowerQuest in December 2003 and Nexland in July 2003. This increase was offset by certain other intangibles being fully amortized during fiscal 2004. The increase in amortization of other intangibles from acquisitions in fiscal 2003 as compared to fiscal 2002 was primarily related to the amortization of other intangibles acquired with the purchase of Recourse and SecurityFocus in August 2002.

Acquired In-Process Research and Development
 

*Percentage not meaningful

23

Acquired in-process research and development during fiscal 2004 resulted from our acquisitions of ON Technology, PowerQuest and Nexland. Acquired in-process research and development during fiscal 2003 resulted from our acquisitions of Riptech, SecurityFocus and Recourse.

The efforts required to develop the acquired in-process technology principally relate to the completion of all planning, design, development and test activities that are necessary to establish that the product or service can be produced to meet its design specifications including features, functions and performance.

We determined the fair value of the acquired in-process technology for each of the purchases by estimating the projected cash flows related to these projects and future revenues to be earned upon commercialization of the products. We discounted the resulting cash flows back to their net present values. We based the net cash flows from such projects on our analysis of the respective markets and estimates of revenues and operating profits related to these projects.

ON Technology

The in-process technology acquired in the ON Technology acquisition consisted primarily of research and development related to its next generation CCM/iCommand and iPatch products, which enable organizations and service providers to manage the full lifecycle of their computing systems over corporate networks. We are using this technology in order to construct a common platform for our Enterprise Administration segment products.

PowerQuest

The in-process technology acquired in the PowerQuest acquisition consisted primarily of research and development related to its Virtual Volume Imaging technology, which provides the capability to recover from server or desktop failures and minimize system downtime. We are integrating this technology into our Enterprise Administration segment product offerings.

Nexland

The in-process technology acquired in the Nexland acquisition consisted primarily of research and development related to a next generation firewall product. We integrated this technology into our firewall and appliance series of products within our Enterprise Security segment.

Riptech

The in-process technology acquired in the Riptech acquisition consisted primarily of research and development related to the fourth generation of its Caltarian technology, which provides real-time information protection through around-the-clock monitoring, analysis and response. We integrated this technology into our managed security services within our Services segment.

SecurityFocus

The in-process technology acquired in the SecurityFocus acquisition consisted primarily of research and development related to new versions of DeepSight Threat Management System and DeepSight Analyzer products, which are threat management systems that provide early warnings of attack, as well as countermeasures to defend these attacks. We integrated this technology into our vulnerability management products within our Enterprise Security segment.

Recourse

The in-process technology acquired in the Recourse acquisition consisted primarily of research and development related to new versions of ManHunt, a network intrusion detection system. We integrated this technology into our intrusion detection products within our Enterprise Security segment.

Restructuring, Site Closures and Other

* Percentage not meaningful

24

During fiscal 2004, we recorded an insignificant amount for costs of severance, related benefits and outplacement services for a member of our senior management team and adjustments to prior period restructuring provisions.

During fiscal 2003, we recorded $10 million for costs of severance, related benefits and outplacement services and $3 million for costs associated with the consolidation of certain facilities in the United States and Europe. The costs resulted from relocating certain development, sales and finance activities, realigning certain worldwide marketing efforts and outsourcing our North American and European consumer support functions. As a result, we terminated 424 employees. In addition, during fiscal 2003, we recorded $2 million to decrease prior period restructuring provisions.

During fiscal 2002, we recorded $18 million for costs associated with the excess facilities and fixed assets associated with relocating certain sites in the United States and Europe. We moved our operations in Newport News, Virginia to a larger facility and we relocated our North American support group from Eugene, Oregon to an expanded facility in Springfield, Oregon. In addition, we consolidated our European support functions by relocating our Leiden, Netherlands operations to Dublin, Ireland and consolidating most of our United Kingdom facilities to one facility in Maidenhead, UK. We also recorded $2 million of costs of severance, related benefits and outplacement services, as we reorganized and consolidated various operating functions. As a result, we terminated 87 employees.

For further discussion on restructuring, site closures and other, see Note 13 of the Notes to Consolidated Financial Statements.

Patent Settlement

In August 2003, we purchased a security technology patent as part of a settlement in Hilgraeve, Inc. versus Symantec Corporation. As part of the settlement, we also received licenses to the remaining patents in Hilgraeve’s portfolio. The total cost of purchasing the patent and licensing additional patents was $63 million, which was paid in cash in August 2003. Under the transaction, we recorded $14 million of patent settlement costs in the June 2003 quarter, representing costs related to benefits received by us in and prior to the June 2003 quarter. During the September 2003 quarter, we recorded acquired product rights of $49 million, which are being amortized to cost of goods sold over the remaining life of the primary patent, which expires in June 2011. There was no corresponding expense recorded during fiscal 2003 or fiscal 2002.

Litigation Judgment

During the March 2002 quarter, we accrued litigation expenses of $3 million for post-judgment interest and other costs related to a judgment by a Canadian court on a decade-old copyright action assumed by us as a result of our acquisition of Delrina Corporation. For further discussion on our current litigation, see Note 15 of the Notes to Consolidated Financial Statements. There was no corresponding expense recorded during fiscal 2004 or fiscal 2003.

Operating Income

* Percentage not meaningful

Operating income increased during fiscal 2004 as compared to fiscal 2003 due primarily to increased revenue growth of 33% during fiscal 2004, offset by increased headcount related costs and related operating expenses. Operating income increased during fiscal 2003 as compared to fiscal 2002 due primarily to the adoption of SFAS No. 142. As a result, in fiscal 2003, we recorded no amortization of goodwill, compared with a charge of $197 million during fiscal 2002. In addition, revenue growth of 31% contributed to the increase in operating income during fiscal 2003.

25

Interest and Other Income (Expense), Net

* Percentage not meaningful

The increase in interest income in fiscal 2004 as compared to fiscal 2003 was due to higher average invested cash balances, partially offset by lower average interest rates. The increase in interest income in fiscal 2003 as compared to fiscal 2002 was due to higher average invested cash balances.

Interest expense during fiscal 2004, 2003 and 2002 was primarily related to the issuance of our $600 million 3% convertible subordinated notes in October 2001.

Other income (expense), net during fiscal 2004, 2003 and 2002 was comprised primarily of immaterial amounts of rental income, offset by banking fees.

Income, Net of Expense, From Sale of Technologies and Product Lines

* Percentage not meaningful

Income, net of expense, from sale of technologies and product lines primarily related to royalty payments received in connection with the licensing of substantially all of the ACT! product line technology to Interact Commerce Corporation for a period of four years through December 2003. During fiscal 2003, this royalty income was offset by the write-off of $3 million of developed technology related to the Web Access Management products due to impairment. The December 2003 quarter payments represent the final royalty and buy-out payments related to the divestiture of our ACT! product line as Interact exercised its option to purchase the licensed technology from us for $60 million less all royalties paid to us to date.

Provision for Income Taxes

Our effective tax rate on income before taxes was approximately 32%, 32% and 162% during fiscal 2004, 2003 and 2002 respectively. The higher effective tax rate in fiscal 2002 reflects the non-deductibility of acquired in-process research and development and substantially all of the goodwill amortization.

Realization of our net deferred tax asset at March 31, 2004 is dependent primarily upon future United States taxable income and our implementation of tax planning strategies. We believe it is more likely than not that the net deferred tax assets will be realized based on historical earnings and expected levels of future taxable income as well as the implementation of tax planning strategies.

26

Levels of future taxable income are subject to the various risks and uncertainties discussed in the Business Risk Factors set forth in this Item 7. An additional valuation allowance against net deferred tax assets may be necessary if it is more likely than not that all or a portion of the net deferred tax assets will not be realized. We will assess the need for an additional valuation allowance on a quarterly basis.

Liquidity and Capital Resources
 

Our principal source of liquidity as of March 31, 2004 is our existing cash, cash equivalents and short-term investments of $2.4 billion, as well as cash that we generate over time from our operations. During fiscal 2004, cash and cash equivalents increased by $545 million and short-term investments increased by $160 million. This increase is primarily due to cash provided by operations and proceeds from the sale of common stock through our employee benefit plans, offset by payments for business acquisitions, purchases of intangible assets and capital expenditures.

Operating Activities

The increase in operating cash flow in fiscal 2004, as compared with fiscal 2003, was primarily the result of an increase in net income of $122 million, an increase in deferred revenue of $123 million and an increase in income taxes payable of $35 million. The increase in deferred revenue was due to a greater volume and term of software maintenance agreements and the increase in income taxes payable was due to improved profitability. The increase in operating cashflow was partially offset by an increase in accounts receivable of $35 million due to higher sales in the month of March 2004 compared to the month of March 2003. The higher March 2004 sales resulted from greater sales of our consumer and enterprise products due to the security threat outbreaks that occurred during February 2004, including the MyDoom and Netsky viruses.

The increase in operating cash flow in fiscal 2003, as compared with fiscal 2002, was primarily the result of improved profitability. Net income increased $277 million, however fiscal 2002 net income included a non-cash charge of $197 million for the amortization of goodwill. We ceased amortizing goodwill in fiscal 2003 in accordance with SFAS 142. Excluding the amortization of goodwill, net income increased $80 million in fiscal 2003, compared to fiscal 2002. The increase in operating cash flow in fiscal 2003 was also the result of increased deferred revenue of $70 million and an increase in income taxes payable of $39 million. The increase in deferred revenue was due to a greater volume of software maintenance agreements and the increase in income taxes payable was due to improved profitability. The increase in operating cashflow was partially offset by an increase in accounts receivable of $74 million due to higher sales in the month of March 2003 compared to the month of March 2002 due to an unusually low net trade accounts receivable balance at March 31, 2002 as compared to the prior six quarter-end balances. In prior quarters, we had generated a larger percentage of net revenues during the last month of each quarter.

Investing Activities

During the past three fiscal years our investing activities have included purchases of property and equipment, purchases of businesses and intangible assets, and purchases and sales of short-term available-for-sale securities.

Net cash used in investing activities decreased in fiscal 2004, as compared to fiscal 2003, due primarily to a decrease in net purchases of marketable securities of $269 million and a decrease in capital expenditures of $81 million. The higher capital expenditures in fiscal 2003 resulted from our purchase of four of our facilities that were classified as operating leases under synthetic lease transactions by purchasing the land and buildings. The decrease in cash used in investing activities was also affected by a $30 million increase in cash payments for acquisitions of businesses and intangible assets during fiscal 2004.

27

Net cash used in investing activities decreased in fiscal 2003, as compared to fiscal 2002, due primarily to a decrease in net purchases of marketable securities and restricted investments of $520 million, offset by a $371 million increase in cash payments for acquisitions of businesses and technologies and a $51 million increase in capital expenditures during fiscal 2003.

Financing Activities

During the past three fiscal years, our financing activities have included cash proceeds from the sale of our common stock through employee benefit plans, cash payments for the repurchase of our common stock and the issuance of our $600 million 3% convertible subordinated notes.

Net cash provided by financing activities increased in fiscal 2004, as compared to fiscal 2003, due to an increase of $51 million of net proceeds from the sale of common stock through our employee benefit plans.

Net cash provided by financing activities decreased in fiscal 2003, as compared to fiscal 2002, due to the $585 million of proceeds received upon the issuance of our 3% convertible subordinated notes, net of debt issuance costs. This decrease was offset by a $140 million decrease in cash spent to repurchase our common stock.

On October 24, 2001, we completed a private offering of $600 million of 3% convertible subordinated notes due November 1, 2006, the net proceeds of which were $585 million. The notes are convertible into shares of our common stock by the holders at any time before maturity at a conversion price of $17.07 per share, subject to certain adjustments. During fiscal 2004 and 2003, an insignificant principal amount of our notes were converted into shares of our common stock. No shares were converted during fiscal 2002. We may redeem the remaining notes on or after November 5, 2004, at a redemption price of 100.75% of stated principal during the period November 5, 2004 through October 31, 2005 and 100% thereafter. Interest is paid semi-annually and we commenced making these payments on May 1, 2002. Debt issuance costs of $16 million related to the notes is amortized on a straight-line basis through November 1, 2006. We have reserved 35.1 million shares of common stock for issuance upon conversion of the notes.

On January 16, 2001, the Board of Directors replaced an earlier stock repurchase program with a new authorization to repurchase up to $700 million of Symantec common stock, not to exceed 60.0 million shares, with no expiration date. On January 20, 2004, the Board of Directors increased the dollar amount of the company’s authorized stock repurchase program from $700 million to $940 million, without any specific limit on the number of shares to be repurchased. In connection with the additional $240 million authorization, we adopted a repurchase plan under Rule 10b5-1 and intend to repurchase $60 million of shares during each calendar 2004 quarter.

During fiscal 2004, we repurchased 1.5 million shares under the amended stock repurchase program, at prices ranging from $39.03 to $41.63 per share, for an aggregate amount of $60 million. During fiscal 2003, we repurchased 4.4 million shares at prices ranging from $13.97 to $14.98 per share, for an aggregate amount of $64 million. During fiscal 2002, we repurchased 19.3 million shares at prices ranging from $8.89 to $12.25 per share, for an aggregate amount of $204 million. As of March 31, 2004, $367 million remained authorized for future repurchases, of which $180 million is expected to be utilized through the 10b5-1 plan through December 2004.

Contractual Obligations

The contractual obligations presented in the table below represent our estimates of future payments under fixed contractual obligations and commitments. Changes in our business needs, cancellation provisions, changing interest rates and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented below a summary of the most significant assumptions used in our information within the context of our consolidated financial position, results of operations and cash flows. The following table summarizes our fixed contractual obligations and commitments as of March 31, 2004 (in thousands):

28

We have certain royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a dollar amount per unit shipped or a percentage of underlying revenue and has not been included in the table above. Certain royalty commitments have minimum commitment obligations; however, as of March 31, 2004 all such obligations are immaterial.

On May 21, 2004, we entered into an agreement to purchase Brightmail, Inc. for an estimated $370 million. The completion of this acquisition is subject to customary closing conditions, and is expected to close in July 2004. We expect to integrate this technology into our Enterprise Security segment.

We believe that existing cash, cash equivalents and short-term investments, as well as cash generated from operating results will be sufficient to fund operations for at least the next year.

Newly Adopted And Recently Issued Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. Under SFAS No. 143, the fair value of a liability for an asset retirement obligation must be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS No. 143 became effective for Symantec beginning in the first quarter of fiscal 2004 and the adoption of this statement did not have a material impact on our financial position or results of operations.

In December 2003, the FASB revised Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 (FIN 46R), which addresses how a business enterprise should evaluate whether it has a controlling interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46, which was issued in January 2003. Before concluding that it is appropriate to apply the voting interest consolidation model to an entity, an enterprise must first determine that the entity is not a variable interest entity or a special purpose entity. FIN 46R became effective for Symantec during fiscal 2004 and the adoption of this statement did not have a material impact on our financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, which provides guidance for classification and measurement of certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 became effective for financial instruments entered into or modified after May 31, 2003, and otherwise became effective for Symantec beginning the second quarter of fiscal 2004 and the adoption of this statement did not have a material impact on our financial position or results of operations.

29

Business Risk Factors

Fluctuations in our quarterly operating results have affected our stock price in the past and could affect our stock price in the future. Our quarterly operating results have fluctuated in the past, and are likely to vary significantly in the future, based on a number of factors related to our industry and the markets for our products. If our quarterly operating results or our predictions of future operating results fail to meet the expectations of analysts and investors, our stock price could be negatively affected. Factors that are likely to cause our operating results to fluctuate include:

	•		Reduced demand for any given product;
	•		Uncertainty about and customer confidence in current economic conditions;
	•		Unfavorable fluctuations in foreign currency exchange rates;
	•		The market’s transition between new releases of operating systems;
	•		The introduction of competitive products;
	•		Seasonality in the end-of-period buying patterns of foreign and domestic software customers; and
	•		The timing of announcements and releases of new or enhanced versions of our products and product upgrades.

In addition, during fiscal 2004, 2003 and 2002, our operating results were materially affected by non-standard charges, including the following:

	•		Acquired in-process research and development;
	•		Restructuring, site closures and other charges;
	•		Litigation settlements; and
	•		Asset impairment charges

Any volatility in our quarterly operating results may make it more difficult for us to raise capital in the future or pursue acquisitions that involve issuances of our common stock or securities convertible or exercisable into our common stock.

There is uncertainty as to whether or not we will be able to sustain the growth rates in sales of our products, particularly in consumer security products. Over the last nine quarters, we experienced a higher than expected rate of growth in sales of our consumer security protection products, and we expect that we will not be able to sustain this high growth rate on a consistent basis. We believe that consumer security protection sales have been spurred by a number of factors over this period of time, including increased broadband usage and increased awareness of security threats to consumer systems, including the recently well publicized, Beagle, Welchia, Blaster, Sobig, MyDoom, NetSky and Sasser viruses. The impact of these factors may diminish over time, and it is possible that our growth rates in sales of security protection products may decline.

We have grown, and may continue to grow, through acquisitions that give rise to risks that could adversely affect our future operating results. We completed four acquisitions each during fiscal 2004 and fiscal 2003, and announced an agreement to complete an acquisition in the first quarter of fiscal 2005 and we will likely pursue future acquisitions. Integrating acquired businesses has been and will continue to be a complex, time consuming and expensive process. To integrate acquired businesses, we must implement our technology systems in the acquired operations and assimilate and manage the personnel of the acquired operations. Our success in completing the integration of acquired businesses may impact the market acceptance of such acquisitions, and our willingness to acquire additional businesses in the future. Further, the difficulties of integrating acquired businesses could disrupt our ongoing business, distract our management focus from other opportunities and challenges, and increase our expenses and working capital requirements. We may face difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions. Our acquisitions may cause us to recognize substantial amounts of goodwill and other intangible assets that will be subject to impairment testing and amortization, and we may assume liabilities. In addition, acquisitions may result in substantial restructuring and other related expenses and write-offs of acquired in-process research and development costs. Further, we may need to issue equity or incur additional debt to finance future acquisitions, which could be dilutive to our existing stockholders or could increase our leverage. Any of these and other factors could harm our ability to achieve anticipated levels of profitability from acquired operations or to realize other anticipated benefits of an acquisition. Mergers and acquisitions of high technology companies are inherently risky, and no assurance can be given that our previous or future acquisitions will be successful and will not materially adversely affect our business, operating results or financial condition.

30

Introduction and integration of new products and technologies may adversely affect our financial results. We have recently introduced new products, such as Symantec^TM Enterprise Security Architecture, or SESA^TM, newly acquired products and products incorporating newly acquired technology, including technologies acquired in the following transactions:

	•		On February 13, 2004, we completed the acquisition of On Technology Corp., a provider of solutions which enable organizations and service providers to manage the full lifecycle of their computing systems over corporate networks.
	•		On December 5, 2003, we completed the acquisition of PowerQuest Inc., a global provider of automated deployment and recovery solutions for corporations and individual users.
	•		On October 15, 2003 we acquired SafeWeb, Inc., a provider of SSL VPN appliances.
	•		On July 17, 2003, we completed the acquisition of Nexland, Inc., a technology driven Internet security company whose Internet Protocol based networking appliances are installed at enterprise branches and telecommuter offices worldwide.

These technologies may not achieve market acceptance and/or may not be able to compete with products either currently in the market or introduced in the future. If these technologies do not achieve market success, our financial results, and the trading price of our common stock could be adversely affected.

Our efforts to develop and sell appliances and integrated solutions may not be successful and our future net revenues and operating results could be adversely affected. We have been in the appliance business for a short period of time. Because of our limited experience with the manufacturing of appliances, and because our appliances generate lower gross margins than our software products, our efforts to develop and sell appliances may not be as successful as we anticipate. In addition, our strategy for future growth includes integrating our various security technologies, management, customer service and support into a single enterprise security solution. We have begun implementing this strategy by selling integrated solutions, such as Symantec Gateway Security and Symantec Client Security. Our integrated solutions may not achieve market acceptance and may not be able to compete with solutions either currently in the market or introduced in the future. If we are unable to achieve market acceptance or compete effectively with solutions of our competitors, our future net revenues and operating results could be adversely affected.

Economic conditions, and conditions affecting the network security market in particular, may have a negative impact on our revenues and margins. The market for our products depends on various economic conditions including those affecting the network security, Internet infrastructure and other related markets. Consumer demand for our products depends, in part, on global economic conditions. On the enterprise side, any slowdown in corporate earnings or tightening of corporate budgets may cause potential customers to delay or cancel security projects, reduce their overall or security-specific information technology budgets, or reduce or cancel orders for our products. Further, if economic conditions deteriorate, customers may experience financial difficulty, cease operations or fail to budget for the purchase of our products. This, in turn, may lead to longer sales cycles, price pressures and collection issues, causing us to realize lower revenues and margins. In addition, many parts of the world are experiencing economic instability, and we cannot predict how these conditions may affect our customers or business.

Our international operations involve risks, and may be subject to political or other non-economic barriers in certain countries. In light of recent terrorist activity and political and military instability internationally, governments could enact additional regulations or restrictions on the use, import or export of encryption technologies. Further, our failure to obtain any required export approval of our technologies, particularly our encryption technologies, could impede our international sales. The additional regulation of encryption technologies could delay or prevent the acceptance and use of encryption products and public networks for secure communications. This might decrease demand for our products and services.

We are exposed to fluctuations in foreign currency exchange rates, which could adversely affect our financial results. A significant portion of our manufacturing costs and operating expenses result from transactions outside of the United States, often in foreign currencies. International sales comprised approximately 52%, 49% and 47% of our total sales in fiscal 2004, 2003 and 2002, respectively. Although our fiscal 2004 operating results have been positively affected by changes in foreign currency rates, our future operating results will continue to be subject to

31

fluctuations in foreign currency rates, and we may be negatively affected by fluctuations in foreign currency rates in the future, especially if international sales continue to grow as a percentage of our total sales.

Our markets are competitive and our financial results and financial condition could be adversely affected if we are unable to anticipate or react to this competition. Our markets are competitive. If we are unable to anticipate or react to this competition, our operating results could be adversely affected by reducing our sales or the prices we can charge for our products. Many of our competitors have significantly lowered, and may continue to lower, the price of their products and we may have to do the same to remain competitive. Our ability to remain competitive depends, in part, on our ability to enhance our products or develop new products that are compatible with new hardware and operating systems. We have no control over, and limited insight into, development efforts by third parties with respect to new hardware and operating systems, and we may not respond effectively or timely to such changes in the market. In addition, we have limited resources and we must make strategic decisions as to the best allocation of our resources to position ourselves for changes in our markets. We may from time to time allocate resources to projects or markets that do not develop as rapidly or fully as we expect. We may also fail to allocate resources to third party products, to markets or to business models that are ultimately more successful than we anticipate.

Operating system providers and network equipment and computer hardware manufacturers are becoming substantial competitors in the market for security solutions, which could adversely affect our financial results. Large operating system providers and network equipment and computer hardware manufacturers with significantly greater financial, marketing or technological resources than we have may leverage their strengths at the computing platform, security layer and network tier levels to compete more aggressively in the market for security solutions. Our failure to adapt effectively to the continued development, acquisition, or licensing of security solutions technology or product rights by one or more of these competitors could negatively impact our competitive position in the market for security solutions.

For example, the continued inclusion of security, remote access or virus protection tools in new operating systems and hardware packages could adversely affect our sales. In particular, Microsoft has added security and remote access features to new versions of its operating system products that provide some of the same functions offered in our products. This competition may decrease or delay the demand for certain of our products, including those currently under development. Furthermore, as hardware vendors incorporate security functions in their network equipment or integrate security within their network and system management products, the demand for some of our products may decrease, including those currently under development.

The trend toward consolidation in the software industry could impede our ability to compete effectively. Consolidation is underway among companies in the software industry as firms seek to offer more extensive suites and broader arrays of software products, as well as integrated software and hardware solutions. Changes resulting from this consolidation may negatively impact our competitive position. In addition, to the extent that we seek to expand our product lines, managerial and technical personnel skills and capacity through acquisitions, the trend toward consolidation may result in our encountering competition, and paying higher prices, for acquired businesses.

Demand for our products is subject to seasonal trends, which could make our stock price more volatile. Although there is no assurance this trend will continue, our sales of consumer products have been seasonal, with higher sales generally in our December and March quarters. To the extent seasonality makes it more difficult to predict our revenues and value our business, our stock price may suffer and the volatility of our stock may increase.

Military actions around the globe could create economic conditions that reduce demand for our products and services by businesses, consumers and government agencies. Political and military instability could slow spending within our target markets, delay sales cycles and otherwise adversely affect our ability to generate revenue and operate effectively. Government demand for our products and services is dictated by budgetary cycles and funding availability and this demand may be adversely affected by a redirection of spending for military or other objectives.

Our financial forecasts may not be achieved, due to the unpredictability of end-of-period buying patterns, which could make our stock price more volatile. The risk of quarterly fluctuations is increased by the fact that a significant portion of our quarterly net revenues has historically been generated during the last month of each fiscal quarter. Most resellers have tended to make a majority of their purchases at the end of a fiscal quarter. In addition, many enterprise customers negotiate site licenses near the end of each quarter. Due to these end-of-period buying

32

patterns, forecasts may not be achieved, either because expected sales do not occur or because they occur at lower prices or on terms that are less favorable to us. This increases the chances that our results could diverge from the expectations of investors and analysts, which could make our stock price more volatile.

Increased reliance on sales of enterprise licenses may result in greater fluctuations in, or otherwise adversely affect, our financial results. Sales of enterprise licenses through our Enterprise Security segment represent a major portion of our business. Enterprise licensing arrangements involve a longer sales cycle than sales through other distribution channels, require greater investment of resources in establishing the enterprise relationship, may involve greater pricing pressure and sometimes result in lower operating margins. In addition, the timing of the execution of volume licenses, or their non-renewal by large customers, could cause our results of operations to vary significantly from quarter to quarter and could have a material adverse impact on our results of operations. In addition, longer license periods impede our ability to increase prices due to increased costs and may adversely impact our operating margins.

If we are unable to attract and retain personnel in a competitive marketplace, the growth and success of our business could be adversely affected. We believe that our future success will depend in part on our ability to recruit and retain highly skilled management, sales, marketing and technical personnel. To accomplish this, we believe that we must provide personnel with a competitive compensation package, including stock options. Increases in shares available for issuance under our stock options plans require stockholder approval in many cases, and institutional stockholders, or stockholders generally, may not approve future increases. Additionally, the FASB proposed a new standard that would require companies to include compensation expense in their statement of operations relating to the issuance of employee stock options. As a result, we may decide to issue fewer stock options and may be impaired in our efforts to attract and retain necessary personnel.

We are dependent upon certain partners to distribute our products and we would be adversely affected if these relationships terminate or diminish. A large portion of our enterprise sales are made through value-added and other resellers, and a large portion of our consumer sales are made through the retail distribution channel. Reliance on these channels subjects us to events that cause unpredictability in demand. This increases the risk that we may not plan effectively for the future, which could result in adverse operating results in future periods. Our distribution partners may also offer our competitors’ products. Their decisions to sell our products are partly a function of pricing, terms and special promotions offered by our competitors and other factors that we do not control and cannot predict. Our agreements with partners are generally nonexclusive and may be terminated by them or by us without cause. We would be adversely affected if companies in our partner program chose to sell greater amounts of competitive offerings relative to the amount they sell of our offerings.

In addition, we sell our consumer products through original equipment manufacturers, or OEMs, who bundle our antivirus and other products with their PCs. We continuously seek to establish new OEM relationships and, conversely, may encounter OEMs that decide either to replace third party security software with their own or switch to a competitor’s product. When we lose an OEM relationship, our consumer sales could be adversely affected unless and until we are able to establish new relationships of similar significance.

Some distribution partners have experienced financial difficulties in the past, and may experience them in the future. If these partners do suffer financial difficulties, we may have reduced sales or increased write-offs, which would adversely affect our operating results.

If we are unable to effectively adapt to changes in the dynamic technological environment, our future revenues and operating results could be adversely affected. We are increasingly focused on the Internet security market, which, in turn is dependent on further acceptance and increased use of the Internet. The following critical issues concerning the use of the Internet remain unresolved and may affect the market for our products and the use of the Internet as a medium to distribute or support our software products and the functionality of some of our products: security; reliability; cost; ease of use; accessibility; quality of service; and potential tax or other government regulations.

In addition, new technologies are gaining acceptance. We must adapt to these changing technological demands. If we are unable to timely assimilate changes brought about by the Internet and wireless based environments, our future net revenues and operating results could be adversely affected.

33

Our research and development efforts may be more costly and time-consuming than anticipated and the results may be unsuccessful, which could adversely impact our financial results. We will need to continue to incur significant research and development expenditures in future periods as we strive to remain competitive. The length of our product development cycle for new products and product enhancements has frequently been greater than we originally expected, and we are likely to experience delays in future product development. In addition, a portion of our development efforts has not been technologically successful and certain products have not achieved market acceptance. As a result, the products we are currently developing or may develop in the future may not be technologically successful, achieve market acceptance or compete effectively with products of our competitors.

Our products are complex and operate in a wide variety of computer configurations, which could result in errors or product failures. Because we offer very complex products, undetected errors, failures or bugs may occur when they are first introduced or when new versions are released. Our products often are installed and used in large-scale computing environments with different operating systems, system management software and equipment and networking configurations, which may cause errors or failures in our products or may expose undetected errors, failures or bugs in our products. In the past, we have discovered software errors, failures and bugs in certain of our product offerings after their introduction and have experienced delays or lost revenues during the period required to correct these errors. Our customers’ computer environments are often characterized by a wide variety of standard and non-standard configurations that make pre-release testing for programming or compatibility errors very difficult and time-consuming. Despite testing by us and by others, errors, failures or bugs may not be found in new products or releases after commencement of commercial shipments. Errors, failures or bugs in products released by us could result in negative publicity, product returns, loss of or delay in market acceptance of our products or claims by customers or others. In addition, if an actual or perceived breach of network security occurs in one of our end customer’s security systems, regardless of whether the breach is attributable to our products, the market perception of the effectiveness of our products could be harmed. Because the techniques used by computer hackers to access or sabotage networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques. Alleviating any of these problems could require significant expenditures of our capital and resources and could cause interruptions, delays or cessation of our product licensing, which could cause us to lose existing or potential customers and would adversely affect results of operations.

Most of our license agreements with customers contain provisions designed to limit our exposure to potential product liability claims. It is possible, however, that these provisions may not prove effective in limiting our liability.

Product returns may negatively affect our net revenues. Product returns can occur when we introduce upgrades and new versions of products or when distributors or retailers have excess inventories, subject to various contractual limitations. Our return policy allows distributors, subject to these contractual limitations, to return purchased products in exchange for new products or credit towards future purchases. End-users may return our products for a full refund within a reasonably short period from the date of purchase. Future returns could exceed the reserves we have established for product returns, which could have a material adverse effect on our operating results.

Increased customer demands on our technical support services may adversely affect our financial results. We may be unable to respond quickly enough to short-term increases in customer demand for support services. We also may be unable to modify the format of our support services to compete with changes in support services provided by competitors. Further customer demand for these services, without corresponding revenue could increase costs and adversely affect our operating results.

We have outsourced the majority of our worldwide consumer support functions. As such, we are highly dependent on the on-going business success of the companies with whom we have contracted to provide these services. If these companies experience financial difficulties, do not maintain sufficiently skilled workers and resources to satisfy our contracts or otherwise fail to perform at a sufficient level under these contracts, the level of support services to our customers may be significantly disrupted, which could materially harm our relationships with these customers.

Our inability to timely distribute our products and services over the Internet, including security patches and updated virus definitions via our LiveUpdate feature, could adversely affect our business. Our ability to maintain and increase the speed with which we provide services to consumers and to increase the scope of these services is limited by and dependent upon the speed and reliability of the Internet. As we incorporate the LiveUpdate technology into more of our products, we are increasingly reliant on the Internet as a means to distribute our security patches and updated virus definitions to our customers. Accordingly, if we, or our customers, are unable to utilize the

34

Internet due to a failure of technology, infrastructure or other reasons, our ability to provide services may suffer, which could lead to a decrease in revenues. In addition, the infrastructure required to support the increase in on-line sales may be insufficient, if our on-lines sales increase at a rate significantly greater than anticipated.

Terrorist activity could target the Internet, computer systems and networks, and security providers, which could adversely affect our ability to generate revenue. Any significant interruption of the Internet, computer systems and/or networks could adversely impact our ability to rapidly and efficiently provide anti-virus and other product updates to our customers.

Our software products and web site may be subject to intentional disruption, which could adversely impact our reputation and future sales. Although we believe we have sufficient controls in place to prevent intentional disruptions, we expect to be an ongoing target of attacks specifically designed to impede the performance of our products. Similarly, experienced computer programmers, or hackers, may attempt to penetrate our network security or the security of our web site and misappropriate proprietary information or cause interruptions of our services. Uninterrupted online availability of our web site is becoming increasingly important, as online subscription renewals comprise a larger portion of our revenues. Our activities could be adversely affected, and our reputation and future sales harmed, if these intentionally disruptive efforts are successful.

We are subject to litigation that could adversely affect our financial results. From time to time, we are subjected to product liability claims, including claims that we have infringed the intellectual property rights of others, as well as other legal claims incidental to our business. We are currently involved in a number of lawsuits, all of which we intend to defend vigorously. However, it is possible that we could suffer an unfavorable outcome in one or more of these cases. Depending on the amount and timing of any unfavorable resolutions of these lawsuits, our future results of operations or cash flows could be materially adversely affected in a particular period.

Although infringement claims may ultimately prove to be without merit, they are expensive to defend and may consume our resources or divert our attention from day-to-day operations. If a third party alleges that we have infringed their intellectual property rights, we may choose to litigate the claim and/or seek an appropriate license from the third party. If we engage in litigation and the third party is found to have a valid patent claim against us and a license is not available on reasonable terms, our business, operating results and financial condition may be materially adversely affected. For example, in the June 2003 quarter, we paid $63 million in relation to the Hilgraeve technology patent settlement, of which $14 million was charged to operating expenses in the June 2003 quarter, and the remainder was capitalized and will be amortized to cost of revenues through June 2011.

Piracy of our software may have a significant adverse impact on our net revenues. Although we are unable to quantify the extent of piracy of our software products, software piracy may depress our net revenues. While this would adversely affect revenue domestically, lost revenue is believed to be even more significant outside of the United States, particularly in countries where laws are less protective of intellectual property rights. We engage in efforts to educate consumers on the benefits of licensing genuine products and to educate lawmakers on the advantages of a business climate where intellectual property rights are protected, and we cooperate with the Business Software Alliance in their efforts to combat piracy. However, these efforts may not affect the piracy of our products.

Our intellectual property and proprietary rights may not be adequately protected from all unauthorized uses, which could adversely impact our financial results. We regard our software and underlying technology as proprietary. We seek to protect our proprietary rights through a combination of confidentiality agreements and copyright, patent, trademark and trade secret laws. Third parties may copy aspects of our products or otherwise obtain and use our proprietary information without authorization or develop similar technology independently. All of our products are protected by copyright laws, and we have a number of patents and patent applications pending. We may not achieve the desired protection from, and third parties may design around, our patents. In addition, existing copyright laws afford limited practical protection. Furthermore, the laws of some foreign countries do not offer the same level of protection of our proprietary rights as the laws of the United States, and we may be subject to unauthorized use of our products. Any legal action that we may bring to protect proprietary information could be expensive and may distract management from day-to-day operations.

We continue to make substantial changes to our information systems that could disrupt our business and our financial results. We plan to continuously improve our Enterprise Resource Planning, Customer Relationship Management and Data Warehouse Information systems to support the form, functionality and scale of the business.

35

These types of transitions frequently prove disruptive to the underlying business of an enterprise and may cause us to incur higher costs than we anticipate. Failure to manage a smooth transition to the new systems and the ongoing operations and support of the new systems could materially harm our business operations.

In addition, our order management and product shipping centers are geographically dispersed. A business disruption could occur as a result of natural disasters or the interruption in service by communications carriers. If our communications between these centers are disrupted, particularly at the end of a fiscal quarter, we may suffer an unexpected shortfall in net revenues and a resulting adverse impact on our operating results. Communication outages, Internet connectivity disruptions, and/or increased volumes of electronic distribution transactions may also cause delays in customer access to our Internet-based services or product sales.

We hold minority interests in non-public companies and if these companies face financial difficulties in their operations, our investments could be impaired and could adversely affect our financial results. We continue to hold minority interests in privately held companies. These investments are inherently risky because these companies are still in the development stage and depend on third parties for financing to support their ongoing operations. In addition, the markets for their technologies or products are typically in the early stages and may never develop. If these companies do no have adequate cash funding to support their operations, or if they encounter difficulties developing their technologies or products, our investments in these companies may be impaired and could adversely affect our financial results.

We may be subject to a higher effective tax rate that could negatively affect our financial results and financial position. Our effective tax rate could be adversely affected by several factors, many of which are outside of our control. Our future effective tax rate could be unfavorably affected by unanticipated changes in the mix of earnings in countries with differing statutory tax rates. We are also subject to changes in tax laws or their interpretations in the various jurisdictions in which we operate which may adversely impact our effective tax rate. In addition, our effective tax rate could be affected by the changes in accounting and tax treatment of stock-based compensation.

If the carrying value of our long-lived assets is not recoverable, an impairment loss must be recognized which would adversely affect our financial results. We evaluate our long-lived assets, including property and equipment, goodwill, acquired product rights and other intangible assets, whenever events or circumstances occur which indicate that these assets might be impaired. In addition, goodwill is evaluated annually for impairment in the fourth quarter of each fiscal year, regardless of events and circumstances. We will continue to evaluate the recoverability of the carrying amount of our long-lived assets, and we may incur substantial impairment charges, which could adversely affect our financial results.

36

Item 7A: Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk related to fluctuations in market prices, interest rates, and foreign currency exchange rates. We use certain derivative financial instruments to manage these risks. All financial instruments used are in accordance with our global investment policy and global foreign exchange policy. We do not use derivative financial instruments for trading purposes.

We also hold equity interests in ten privately-held companies. These investments were recorded at cost, and are classified as other long-term assets on the Consolidated Balance Sheets. These investments are inherently risky and we could lose our entire initial investment in these companies. As of March 31, 2004, these investments had an aggregate carrying value of $11 million.

Interest Rate Sensitivity

We consider investments in highly liquid instruments purchased with an original maturity of 90 days or less to be cash equivalents. All of our cash equivalents and short-term investments are classified as available-for-sale securities as of the balance sheet dates. Our available-for-sale securities are reported at fair market value and any unrealized gains and losses are included as a component in Stockholders’ Equity in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheet. Our cash equivalents and short-term investments consist primarily of corporate securities, taxable auction rate securities, US government and government-sponsored securities and money market funds.

The following table presents the fair value and hypothetical changes in fair market values of our significant financial instruments held as of March 31, 2004 that are sensitive to changes in interest rates (in millions):

The modeling technique used above measures the change in fair market value arising from selected potential changes in interest rates. Market changes reflect immediate hypothetical parallel shifts in the yield curve of minus 75 basis points, minus 25 basis points, plus 50 basis points, plus 100 basis points and plus 150 basis points, which are representative of the movements in the United States Federal Funds Rate, Euro Area ECB Rate and Canada Overnight Rate.

Exchange Rate Sensitivity

We conduct business in 30 international currencies through our worldwide operations. We believe that the use of foreign exchange forward contracts should reduce the risks that arise from conducting business in international markets.

We hedge risks associated with certain foreign currency cash, investments, receivables and payables in order to minimize the impact of changes in foreign currency fluctuations on these assets and liabilities denominated in foreign currencies. Foreign exchange forward contracts as of March 31, 2004 were as follows (in millions):

We believe that these foreign exchange forward contracts do not subject us to undue risk from the movement of foreign exchange rates because gains and losses on these contracts are offset by losses and gains on the underlying assets and liabilities. All contracts have a maturity of no more than 35 days. Gains and losses are accounted for as other income (expense), net each period. We regularly review our hedging program and may make changes as a result of this review.

37

Item 8: Financial Statements and Supplementary Data

Annual Financial Statements

See Part IV, Item 15 of this Annual Report on Form 10-K.

Selected Quarterly Data

We have a 52/53-week fiscal accounting year. Accordingly, we have presented quarterly fiscal periods, comprised of 13/14 weeks, as follows:

(In thousands, except net income per share)

	(a)		On August 6, 2003, we purchased a security technology patent as part of a settlement in Hilgraeve, Inc. v. Symantec Corporation. For more information, see Note 4 of the Notes to Consolidated Financial Statements.
	(b)		Per share amounts reflect the two-for-one stock splits effected as a stock dividend, which occurred on November 19, 2003.
	(c)		The three months ended June 30, 2003 comprised 14 weeks of activity.

Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

In September 2002, we dismissed Ernst & Young LLP as our independent auditors and engaged KPMG LLP as our new independent auditors to audit our financial statements for the fiscal years ended March 31, 2004 and 2003. We filed a current report on Form 8-K on September 23, 2002, reporting these events.

The report of Ernst & Young LLP for the fiscal year ended March 31, 2002 contained no adverse opinions, disclaimer of opinion or qualification or modification as to uncertainty, audit scope or accounting principles.

We have had no disagreements with our accountants on any accounting or financial disclosures.

38

Item 9A: Controls and Procedures

(a)		Evaluation of Disclosure Controls and Procedures. The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Our chief executive officer and our chief financial officer have concluded, based on the evaluation of the effectiveness of our disclosure controls and procedures by our management, with the participation of our chief executive officer and our chief financial officer, as of the end of the period covered by this report, that our disclosure controls and procedures were effective for this purpose.
(b)		Changes in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

39

PART III

Item 10: Directors and Executive Officers of the Registrant

Information with respect to this Item may be found in the section captioned “Directors and Management – Directors and Executive Officers,” and “Section 16(a) Beneficial Ownership Reporting Compliance” appearing in the definitive Proxy Statement that we will deliver to stockholders in connection with our Annual Meeting of Stockholders for 2004. Such information is incorporated herein by reference.

We have adopted a code of business conduct that applies to all Symantec employees. We have also adopted a code of ethics for our chief executive officer and senior financial officers, including our principal executive officer, principal financial officer and principal accounting officer. Our Code of Business Conduct and Code of Ethics for Chief Executive Officer and Senior Financial Officers are posted on our website at http://www.symantec.com, and may be found as follows:

	1.		From our main Web page, first click on “About Symantec,” and
	2.		Then click on “Investor Relations.”
	3.		Next, under “Corporate Governance,” click on “Company Charters.”

We will post any amendments to or waivers from our Code of Business Conduct and Code of Ethics for Chief Executive Officer and Senior Financial Officers at that location.

Item 11: Executive Compensation

Information with respect to this Item may be found in the section captioned “Directors and Management - Compensation of Executive Officers,” “Report of the Compensation Committee on Executive Compensation” and “Comparison of Cumulative Total Return” appearing in the definitive Proxy Statement to be delivered to stockholders in connection with our Annual Meeting of Stockholders for 2004. Such information is incorporated herein by reference.

Item 12: Security Ownership of Certain Beneficial Owners and Management

Information with respect to this Item may be found in the sections captioned “Directors and Management - Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” appearing in the definitive Proxy Statement to be delivered to stockholders in connection with our Annual Meeting of Stockholders for 2004. Such information is incorporated herein by reference.

Item 13: Certain Relationships and Related Transactions

Information with respect to this Item may be found in the section captioned “Related Party Transactions” appearing in the definitive Proxy Statement to be delivered to stockholders in connection with our Annual Meeting of Stockholders for 2004. Such information is incorporated herein by reference.

Item 14: Principal Accountant Fees and Services

Information with respect to this Item may be found in the section captioned “Principal Accountant Fees and Services” appearing in the definitive Proxy Statement to be delivered to stockholders in connection with our Annual Meeting of Stockholders for 2004. Such information is incorporated herein by reference.

40

PART IV

Item 15: Exhibits, Financial Statement Schedules and Reports on Form 8-K

Upon written request, we will provide, without charge, a copy of our Annual Report on Form 10-K, including the consolidated financial statements, financial statement schedule and any exhibits for our most recent fiscal year. All requests should be sent to:

Helyn Corcos Investor Relations Symantec Corporation 20330 Stevens Creek Boulevard Cupertino, California 95014 408-517-8324

(a)

The following documents are filed as part of this report:

41