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Original Source: FD (FAIR DISCLOSURE) WIRE
MODERATOR: Well, we might as well get started to keep things on time. My name is Phil Ruple [ph]; I'm the software analyst here at Wachovia, for those who haven't met me, and it's my pleasure to introduce the next company, McAfee, one of the leaders in the subsegment of software security. And here to tell us the McAfee story and then answer questions, I'm pleased to introduce George Samenuk, the CEO. George?
GEORGE SAMENUK, CHAIRMAN, CEO, MCAFEE: Thank you, Phil. Good afternoon, ladies and gentlemen. First I will read some prepared remarks concerning cautionary statement and a few opening remarks and then go into the presentation.
This presentation may contain forward-looking statements. These statements include those regarding future operating margins and operating expense expectations; revenue and earnings guidance for the second quarter, and full-year 2006; expected revenue realization rates; new and future product introductions and shipments; and new revenue opportunity associated with them. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties. We caution listeners that actual results may vary, perhaps materially, from the forward-looking statements referenced in this call, including any forward-looking statements made during the Q&A session. We encourage all of you to review the company's filings with the SEC posted on our website, including the company's first quarter 2006 10-Q filed May 2nd of 2006 for more detailed information on the risks and uncertainties related to the company and its business. Nothing in this presentation constitutes an update or reiteration of guidance presented on April 27th, 2006.
Before I get into the presentation, I'd like to make three points that address the questions you might have about our past stock option practices. First, McAfee has a rigorous and independent review process underway. As you know, management's initial review process identified an improper option to grant and the board terminated one of our executives. Subsequently, our board has created a special committee of independent directors to conduct a detailed review of this matter. The special committee has hired independent counsel to help them. Further, we are cooperating with both the SEC and the Department of Justice. We do not know when the independent review will be completed by our special committee, nor can we comment on the government's process.
Second, we believe McAfee is well-positioned to keep moving its business forward. During this process, we intend to remain focused on running our business. We are well-positioned because, first and most importantly, we have a deep team of strong professionals around the world serving our customers and business partners that run our business. And because our financial strength and our momentum in the markets has been very, very strong over the last five quarters, with 22% revenue growth in 2005 and 16% revenue growth in the first quarter of 2006.
And as a result -- my third point -- we remain focused on executing our strategy. While the board deals with this review process, our management team and I are continuing to direct our attention to our strategies to build the business.
Now, in the rest of my remarks, let's turn to the business strategies and the progress that we're making.
McAfee is purely focused on security. For the last six years, we've been shedding the businesses that were non-security focused, Sniffer and Magic, and shedding the businesses that were in security where we were laggards, like PGP and Gauntlet Firewall and some of the other businesses. You will continue to see us remain 100% focused on security.
Like I said, last year was a robust year for McAfee, with 22% revenue growth, 109% year-over-year EPS growth, operating cash …