Juniper Networks, Inc. Preliminary Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Net revenues: Product $ 739,096 $ 745,860 $ 2,567,992 $ 2,910,960 Service 202,358 177,633 747,920 661,416 ----------- ----------- ----------- ----------- Total net revenues 941,454 923,493 3,315,912 3,572,376 Cost of revenues: Product 234,756 230,610 841,722 867,595 Service 81,865 73,660 316,080 298,371 ----------- ----------- ----------- ----------- Total cost of revenues 316,621 304,270 1,157,802 1,165,966 ----------- ----------- ----------- ----------- Gross margin 624,833 619,223 2,158,110 2,406,410 Operating expenses: Research and development 187,210 180,134 741,708 731,151 Sales and marketing 204,875 206,054 734,038 782,940 General and administrative 41,196 37,971 159,459 144,837 Amortization of purchased intangible assets 1,157 5,190 10,416 43,508 Restructuring charges 3,212 -- 19,463 -- Other charges 12,000 -- 13,000 9,000 ----------- ----------- ----------- ----------- Total operating expenses 449,650 429,349 1,678,084 1,711,436 ----------- ----------- ----------- ----------- Operating income 175,183 189,874 480,026 694,974 Interest and other income, net 347 8,232 6,928 48,749 Loss on equity investments (2,251) (13,333) (5,562) (14,832) ----------- ----------- ----------- ----------- Income before income taxes and noncontrolling interest* 173,279 184,773 481,392 728,891 Provision for income taxes 44,093 52,297 258,111 217,142 ----------- ----------- ----------- ----------- Consolidated net income $ 129,186 $ 132,476 $ 223,281 $ 511,749 Plus: Net loss attributable to noncontrolling interest* 1,771 -- 1,771 -- ----------- ----------- ----------- ----------- Net income attributable to Juniper Networks $ 130,957 $ 132,476 $ 225,052 $ 511,749 =========== =========== =========== =========== Net income per share attributable to Juniper Networks common stockholders: Basic $ 0.25 $ 0.25 $ 0.43 $ 0.96 =========== =========== =========== =========== Diluted $ 0.24 $ 0.25 $ 0.42 $ 0.93 =========== =========== =========== =========== Shares used in computing net income per share: Basic 523,200 527,634 523,603 530,337 =========== =========== =========== =========== Diluted 538,887 534,817 534,015 551,433 =========== =========== =========== =========== * Reflects noncontrolling interest in a joint venture. Juniper Networks, Inc. Stock-Based Compensation by Category (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Cost of revenues - Product $ 1,074 $ 727 $ 3,906 $ 2,952 Cost of revenues - Service 3,192 2,240 11,705 9,249 Research and development 15,294 12,042 59,282 46,963 Sales and marketing 11,070 9,475 41,930 36,228 General and administrative 7,584 4,770 22,836 12,741 ---------- ---------- ---------- ---------- Total $ 38,214 $ 29,254 $ 139,659 $ 108,133 ========== ========== ========== ========== Juniper Networks, Inc. Stock-Based Compensation Related Payroll Tax by Category (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- 2009 2008 2009 2008 --------- ---------- ---------- ---------- Cost of revenues - Product $ (23) $ 1 $ 25 $ 65 Cost of revenues - Service (70) 2 75 202 Research and development (407) 16 133 679 Sales and marketing (155) 140 514 1,705 General and administrative 4 1 85 112 --------- ---------- ---------- ---------- Total $ (651) $ 160 $ 832 $ 2,763 ========= ========== ========== ========== Juniper Networks, Inc. Net Revenues by Reportable Segment (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ----------------------- ----------------------- 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Infrastructure - Product $ 562,978 $ 586,945 $ 1,959,198 $ 2,301,844 Infrastructure - Service 132,363 115,349 482,437 424,012 ----------- ----------- ----------- ----------- Total Infrastructure $ 695,341 $ 702,294 $ 2,441,635 $ 2,725,856 =========== =========== =========== =========== Service Layer Technologies - Product $ 176,118 $ 158,915 $ 608,794 $ 609,116 Service Layer Technologies - Service 69,995 62,284 265,483 237,404 ----------- ----------- ----------- ----------- Total Service Layer Technologies $ 246,113 $ 221,199 $ 874,277 $ 846,520 =========== =========== =========== =========== Total Infrastructure and Service Layer Technologies $ 941,454 $ 923,493 $ 3,315,912 $ 3,572,376 =========== =========== =========== =========== Juniper Networks, Inc. Net Revenues by Geographic Region (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ----------------------- ----------------------- 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Americas $ 514,482 $ 481,158 $ 1,687,857 $ 1,766,225 Europe, Middle East, and Africa 254,899 274,384 953,218 1,077,654 Asia Pacific 172,073 167,951 674,837 728,497 ----------- ----------- ----------- ----------- Total $ 941,454 $ 923,493 $ 3,315,912 $ 3,572,376 =========== =========== =========== =========== Juniper Networks, Inc. Net Revenues by Market (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ----------------------- ----------------------- 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Service Provider $ 639,269 $ 634,868 $ 2,197,069 $ 2,568,159 Enterprise 302,185 288,625 1,118,843 1,004,217 ----------- ----------- ----------- ----------- Total $ 941,454 $ 923,493 $ 3,315,912 $ 3,572,376 =========== =========== =========== =========== Juniper Networks, Inc. Reconciliation between GAAP and non-GAAP Financial Measures (in thousands, except percentages) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- GAAP Cost of revenues - Product $ 234,756 $ 230,610 $ 841,722 $ 867,595 Stock-based compensation expense C (1,074) (727) (3,906) (2,952) Stock-based compensation related payroll tax C 23 (1) (25) (65) Amortization of purchased intangible assets A (904) (1,369) (5,011) (5,476) --------- --------- --------- --------- Non-GAAP Cost of revenues - Product 232,801 228,513 832,780 859,102 ========= ========= ========= ========= GAAP Cost of revenues - Service 81,865 73,660 316,080 298,371 Stock-based compensation expense C (3,192) (2,240) (11,705) (9,249) Stock-based compensation related payroll tax C 70 (2) (75) (202) --------- --------- --------- --------- Non-GAAP Cost of revenues - Service 78,743 71,418 304,300 288,920 ========= ========= ========= ========= GAAP Gross margin - Product 504,340 515,250 1,726,270 2,043,365 Stock-based compensation expense C 1,074 727 3,906 2,952 Stock-based compensation related payroll tax C (23) 1 25 65 Amortization of purchased intangible assets A 904 1,369 5,011 5,476 --------- --------- --------- --------- Non-GAAP Gross margin - Product 506,295 517,347 1,735,212 2,051,858 ========= ========= ========= ========= GAAP Product gross margin as a % of product revenue 68.2% 69.1% 67.2% 70.2% Stock-based compensation expense as a % of product revenue C 0.2% 0.1% 0.2% 0.1% Stock-based compensation related payroll tax as a % of product revenue C -- -- -- -- Amortization of purchased intangible assets as a % of product revenue A 0.1% 0.2% 0.2% 0.2% --------- --------- --------- --------- Non-GAAP Product gross margin as a % of product revenue 68.5% 69.4% 67.6% 70.5% ========= ========= ========= ========= GAAP Gross margin - Service 120,493 103,973 431,840 363,045 Stock-based compensation expense C 3,192 2,240 11,705 9,249 Stock-based compensation related payroll tax C (70) 2 75 202 --------- --------- --------- --------- Non-GAAP Gross margin - Service 123,615 106,215 443,620 372,496 ========= ========= ========= ========= Juniper Networks, Inc. Reconciliation between GAAP and non-GAAP Financial Measures (in thousands, except percentages) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, -------------------- ------------------------ 2009 2008 2009 2008 --------- --------- ----------- ----------- GAAP Service gross margin as a % of service revenue 59.5% 58.5% 57.7% 54.9% Stock-based compensation expense as a % of service revenue C 1.6% 1.3% 1.6% 1.4% Stock-based compensation related payroll tax as a % of service revenue C -- -- -- -- --------- --------- ----------- ----------- Non-GAAP Service gross margin as a % of service revenue 61.1% 59.8% 59.3% 56.3% ========= ========= =========== =========== GAAP Gross margin $ 624,833 $ 619,223 $ 2,158,110 $ 2,406,410 Stock-based compensation expense C 4,266 2,967 15,611 12,201 Stock-based compensation related payroll tax C (93) 3 100 267 Amortization of purchased intangible assets A 904 1,369 5,011 5,476 --------- --------- ----------- ----------- Non-GAAP Gross margin 629,910 623,562 2,178,832 2,424,354 ========= ========= =========== =========== GAAP Gross margin as a % of revenue 66.4% 67.1% 65.1% 67.4% Stock-based compensation expense as a % of revenue C 0.4% 0.3% 0.4% 0.3% Stock-based compensation related payroll tax as a % of revenue C -- -- -- -- Amortization of purchased intangible assets as a % of revenue A 0.1% 0.1% 0.2% 0.2% --------- --------- ----------- ----------- Non-GAAP Gross margin as a % of revenue 66.9% 67.5% 65.7% 67.9% ========= ========= =========== =========== GAAP Research and development expense 187,210 180,134 741,708 731,151 Stock-based compensation expense C (15,294) (12,042) (59,282) (46,963) Stock-based compensation related payroll tax C 407 (16) (133) (679) --------- --------- ----------- ----------- Non-GAAP Research and development expense 172,323 168,076 682,293 683,509 ========= ========= =========== =========== GAAP Sales and marketing expense 204,875 206,054 734,038 782,940 Stock-based compensation expense C (11,070) (9,475) (41,930) (36,228) Stock-based compensation related payroll tax C 155 (140) (514) (1,705) --------- --------- ----------- ----------- Non-GAAP Sales and marketing expense 193,960 196,439 691,594 745,007 ========= ========= =========== =========== GAAP General and administrative expense 41,196 37,971 159,459 144,837 Stock-based compensation expense C (7,584) (4,770) (22,836) (12,741) Stock-based compensation related payroll tax C (4) (1) (85) (112) --------- --------- ----------- ----------- Non-GAAP General and administrative expense 33,608 33,200 136,538 131,984 ========= ========= =========== =========== GAAP Operating expense 449,650 429,349 1,678,084 1,711,436 Stock-based compensation expense C (33,948) (26,287) (124,048) (95,932) Stock-based compensation related payroll tax C 558 (157) (732) (2,496) Amortization of purchased intangible assets A (1,157) (5,190) (10,416) (43,508) Restructuring charges B (3,212) -- (19,463) -- Other charges - legal settlement B (12,000) -- (13,000) (9,000) --------- --------- ----------- ----------- Non-GAAP Operating expense $ 399,891 $ 397,715 $ 1,510,425 $ 1,560,500 ========= ========= =========== =========== Juniper Networks, Inc. Reconciliation between GAAP and non-GAAP Financial Measures (in thousands, except percentages) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- GAAP Operating income $ 175,183 $ 189,874 $ 480,026 $ 694,974 Stock-based compensation expense C 38,214 29,254 139,659 108,133 Stock-based compensation related payroll tax C (651) 160 832 2,763 Amortization of purchased intangible assets A 2,061 6,559 15,427 48,984 Restructuring charges B 3,212 -- 19,463 -- Other charges - legal settlement B 12,000 -- 13,000 9,000 --------- --------- --------- --------- Non-GAAP Operating income 230,019 225,847 668,407 863,854 ========= ========= ========= ========= GAAP Operating margin 18.6% 20.6% 14.5% 19.5% Stock-based compensation expense as a % of revenue C 4.1% 3.2% 4.2% 3.0% Stock-based compensation related payroll tax as a % of revenue C (0.1)% -- 0.1% 0.1% Amortization of purchased intangible assets as a % of revenue A 0.2% 0.7% 0.5% 1.3% Restructuring charges as a % of revenue B 0.3% -- 0.5% -- Other charges - legal settlement as a % of revenue B 1.3% -- 0.4% 0.3% --------- --------- --------- --------- Non-GAAP Operating margin 24.4% 24.5% 20.2% 24.2% ========= ========= ========= ========= GAAP Other income and expense, net (1,904) (5,101) 1,366 33,917 Loss on equity investments B 2,251 13,333 5,562 14,832 --------- --------- --------- --------- Non-GAAP Other income and expense, net 347 8,232 6,928 48,749 ========= ========= ========= ========= GAAP Provision for income tax 44,093 52,297 258,111 217,142 Non-recurring income tax charge B -- -- (56,683) -- Valuation allowance on deferred tax assets B -- -- (61,755) -- Income tax effect of non-GAAP exclusions B 14,394 12,765 45,892 44,692 --------- --------- --------- --------- Non-GAAP Provision for income tax 58,487 65,062 185,565 261,834 ========= ========= ========= ========= Non-GAAP Income tax rate 25.4% 27.8% 27.5% 28.7% ========= ========= ========= ========= Non-GAAP Income before income taxes and noncontrolling interest* $ 230,366 $ 234,079 $ 675,335 $ 912,603 ========= ========= ========= ========= * Consists of non-GAAP operating income plus non-GAAP net other income and expense. Juniper Networks, Inc. Reconciliation between GAAP and non-GAAP Financial Measures (in thousands, except per share amounts and percentages) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- 2009 2008 2009 2008 --------- --------- --------- --------- GAAP Net income attributable to Juniper Networks $ 130,957 $ 132,476 $ 225,052 $ 511,749 Stock-based compensation expense C 38,214 29,254 139,659 108,133 Stock-based compensation related payroll tax C (651) 160 832 2,763 Amortization of purchased intangible assets A 2,061 6,559 15,427 48,984 Restructuring charges B 3,212 -- 19,463 -- Other charges - legal settlement B 12,000 -- 13,000 9,000 Loss on equity investments B 2,251 13,333 5,562 14,832 Non-recurring income tax charge B -- -- 56,683 -- Valuation allowance on deferred tax assets B -- -- 61,755 -- Income tax effect of non-GAAP exclusions B (14,388) (12,765) (45,886) (44,692) --------- --------- --------- --------- Non-GAAP Net income $ 173,656 $ 169,017 $ 491,547 $ 650,769 ========= ========= ========= ========= Non-GAAP Net income per share: Basic D $ 0.33 $ 0.32 $ 0.94 $ 1.23 ========= ========= ========= ========= Diluted D $ 0.32 $ 0.32 $ 0.92 $ 1.18 ========= ========= ========= ========= Shares used in computing non-GAAP net income per share: Basic D 523,200 527,634 523,603 530,337 ========= ========= ========= ========= Diluted D 538,887 534,817 534,015 551,433 ========= ========= ========= ========= GAAP Net income attributable to Juniper Networks as a % of revenue 13.9% 14.3% 6.8% 14.3% Stock-based compensation expense as a % of revenue C 4.1% 3.2% 4.2% 3.0% Stock-based compensation related payroll tax as a % of revenue C (0.1)% -- -- 0.1% Amortization of purchased intangible assets as a % of revenue A 0.2% 0.7% 0.5% 1.4% Restructuring charges as a % of revenue B 0.3% -- 0.5% -- Other charges - legal settlement as a % of revenue B 1.3% -- 0.4% 0.3% Loss on equity investments B 0.2% 1.4% 0.2% 0.4% Non-recurring income tax charge as a % of revenue B -- -- 1.7% -- Valuation allowance on deferred tax assets as a % of revenue B -- -- 1.9% -- Income tax effect of non-GAAP exclusions as a % of revenue B (1.5)% (1.3)% (1.4)% (1.3)% --------- --------- --------- --------- Non-GAAP Net income as a % of revenue 18.4% 18.3% 14.8% 18.2% ========= ========= ========= =========Discussion of Non-GAAP Financial Measures The table above includes the following non-GAAP financial measures from our Preliminary Condensed Consolidated Statements of Operations: cost of product revenue; cost of service revenue; product gross margin, product gross margin as a percentage of product revenue; service gross margin; service gross margin as a percentage of service revenue; gross margin; gross margin as a percentage of revenue; research and development expense; sales and marketing expense; general and administrative expense; operating expense; operating income; operating margin; net other income and expense; income before income taxes and noncontrolling interest; provision for income taxes; income tax rate; net income; net income per share and net income as a percentage of revenue. These measures are not presented in accordance with, nor are they a substitute for; U.S. generally accepted accounting principles, or GAAP. In addition, these measures may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes. The non-GAAP financial measures used in the table above should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future. We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures presented above to be helpful in assessing the performance of the continuing operation of our business. By continuing operations we mean the ongoing revenue and expenses of the business excluding certain items that render comparisons with prior periods or analysis of on-going operating trends more difficult, such as expenses not directly related to the actual cash costs of development, sale, delivery or support of our products and services, or expenses that are reflected in periods unrelated to when the actual amounts were incurred or paid. Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides such readers with useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. In addition, we have historically reported non-GAAP results to the investment community and believe that continuing to provide non-GAAP measures provides investors with a tool for comparing results over time. In assessing the overall health of our business for the periods covered by the tables above and, in particular, in evaluating the financial line items presented in the table above, we have excluded items in the following three general categories, each of which are described below: Acquisition-Related Expenses, Other Items, and Stock-Based Compensation Related Items. We also provide additional detail below regarding the shares used to calculate our non-GAAP net income per share. Notes identified for line items in the table above correspond to the appropriate note description below. Note A: Acquisition-Related Expenses. We exclude certain expense items resulting from acquisitions including the following, when applicable: (i) amortization of purchased intangible assets associated with our acquisitions; (ii) compensation related to acquisitions; and (iii) acquisition-related charges. The amortization of purchased intangible assets associated with our acquisitions results in our recording expenses in our GAAP financial statements that were already expensed by the acquired company before the acquisition and for which we have not expended cash. Moreover, had we internally developed the products acquired, the amortization of intangible assets, and the expenses of uncompleted research and development would have been expensed in prior periods. Accordingly, we analyze the performance of our operations in each period without regard to such expenses. In addition, acquisitions result in non-continuing operating expenses, which would not otherwise have been incurred by us in the normal course of our business operations. For example, we have incurred deferred compensation charges related to assumed options and transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees. We believe that providing non-GAAP information for acquisition-related expense items in addition to the corresponding GAAP information allows the users of our financial statements to better review and understand the historic and current results of our continuing operations, and also facilitates comparisons to less acquisitive peer companies. Note B: Other Items. We exclude certain other items that are the result of either unique or unplanned events including the following, when applicable: (i) restructuring and related costs; (ii) impairment charges; (iii) gain or loss on legal settlement, net of related transaction costs; (iv) retroactive impacts of certain tax settlements; (v) significant effects of tax legislation and judicial or administrative interpretation of tax regulations; (vi) gain or loss on equity investments;; and (vii) the income tax effect on our financial statements of excluding items related to our non-GAAP financial measures. It is difficult to estimate the amount or timing of these items in advance. Restructuring and impairment charges result from events, which arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on-going operations with prior and future periods. In the case of legal settlements, these gains or losses are recorded in the period in which the matter is concluded or resolved even though the subject matter of the underlying dispute may relate to multiple or different periods. As such, we believe that these expenses do not accurately reflect the underlying performance of our continuing operations for the period in which they are incurred. Similarly, the retroactive impacts of certain tax settlements and significant effects of retroactive tax legislation are unique events that occur in periods that are generally unrelated to the level of business activity to which such settlement or legislation applies. We believe this limits comparability with prior periods and that these expenses do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred. Whether we realize gains or losses on equity investments is based primarily on the performance and market value of those independent companies. Accordingly, we believe that these gains and losses do not reflect the underlying performance of our continuing operations. We also believe providing financial information with and without the income tax effect of excluding items related to our non-GAAP financial measures provide our management and users of the financial statements with better clarity regarding the on-going performance and future liquidity of our business. Because of these factors, we assess our operating performance both with these amounts included and excluded, and by providing this information, we believe the users of our financial statements are better able to understand the financial results of what we consider our continuing operations. Note C: Stock-Based Compensation Related Items. We provide non-GAAP information relative to our expense for stock-based compensation and related payroll tax. We began to include stock-based compensation expense in our GAAP financial measures in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, Compensation - Stock Compensation ("FASB ASC Topic 718"), in January 2006. Because of varying available valuation methodologies, subjective assumptions and the variety of award types, which affect the calculations of stock-based compensation, we believe that the exclusion of stock-based compensation allows for more accurate comparisons of our operating results to our peer companies. Further, we believe that excluding stock-based compensation expense allows for a more accurate comparison of our financial results to previous periods during which our equity-based awards were not required to be reflected in our income statement. Stock-based compensation is very different from other forms of compensation. A cash salary or bonus has a fixed and unvarying cash cost. For example, the expense associated with a $10,000 bonus is equal to exactly $10,000 in cash regardless of when it is awarded and who it is awarded by. In contrast, the expense associated with an award of an option for 1,000 shares of stock is unrelated to the amount of compensation ultimately received by the employee; and the cost to the company is based on a stock-based compensation valuation methodology and underlying assumptions that may vary over time and that does not reflect any cash expenditure by the company because no cash is expended. Furthermore, the expense associated with granting an employee an option is spread over multiple years unlike other compensation expenses which are more proximate to the time of award or payment. For example, we may be recognizing expense in a year where the stock option is significantly underwater and is not going to be exercised or generate any compensation for the employee. The expense associated with an award of an option for 1,000 shares of stock by us in one quarter may have a very different expense than an award of an identical number of shares in a different quarter. Finally, the expense recognized by us for such an option may be very different than the expense to other companies for awarding a comparable option, which makes it difficult to assess our operating performance relative to our competitors. Similar to stock-based compensation, payroll tax on stock option exercises is dependent on our stock price and the timing and exercise by employees of our stock-based compensation, over which our management has little control, and as such does not correlate to the operation of our business. Because of these unique characteristics of stock-based compensation and the related payroll tax, management excludes these expenses when analyzing the organization's business performance. We also believe that presentation of such non-GAAP information is important to enable readers of our financial statements to compare current period results with periods prior to the adoption of FASB ASC Topic 718. Note D: Non-GAAP Net Income Per Share Items. We provide basic non-GAAP net income per share and diluted non-GAAP net income per share. The basic non-GAAP net income per share amount was calculated based on our non-GAAP net income and the weighted-average number of shares outstanding during the reporting period. The diluted non-GAAP income per share included additional dilution from potential issuance of common stock, except when such issuances would be anti-dilutive.
Juniper Networks, Inc. Preliminary Condensed Consolidated Balance Sheets (in thousands) (unaudited) December 31, December 31, 2009 2008 ------------- ------------- ASSETS Current assets: Cash and cash equivalents $ 1,604,723 $ 2,019,084 Short-term investments 570,522 172,896 Accounts receivable, net of allowances 458,652 429,970 Deferred tax assets, net 142,641 145,230 Prepaid expenses and other current assets 48,744 49,026 ------------- ------------- Total current assets 2,825,282 2,816,206 Property and equipment, net 455,651 436,433 Long-term investments 483,505 101,415 Restricted cash 53,732 43,442 Purchased intangible assets, net 13,834 28,861 Goodwill 3,658,602 3,658,602 Long-term deferred tax assets, net 3,800 71,079 Other long-term assets 35,425 31,303 ------------- ------------- Total assets $ 7,529,831 $ 7,187,341 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 242,591 $ 249,854 Accrued compensation 176,551 160,471 Accrued warranty 38,199 40,090 Deferred revenue 571,652 459,749 Income taxes payable 35,781 33,047 Other accrued liabilities 142,526 113,399 ------------- ------------- Total current liabilities 1,207,300 1,056,610 Long-term deferred revenue 181,937 130,514 Long-term income tax payable 170,245 78,164 Other long-term liabilities 37,531 20,648 Commitments and contingencies Juniper Networks stockholders' equity: Common stock, $0.00001 par value 5 5 Additional paid-in capital 9,060,089 8,811,497 Accumulated other comprehensive loss (1,433) (4,245) Accumulated deficit (3,128,472) (2,905,852) ------------- ------------- Total Juniper Networks stockholders' equity 5,930,189 5,901,405 Noncontrolling interest 2,629 -- ------------- ------------- Total equity 5,932,818 5,901,405 ------------- ------------- Total liabilities and stockholders' equity $ 7,529,831 $ 7,187,341 ============= ============= Juniper Networks, Inc. Preliminary Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Twelve Months Ended December 31, ---------------------------- 2009 2008 ------------- ------------- Cash flows from operating activities: Consolidated net income $ 223,281 $ 511,749 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 148,373 172,453 Stock-based compensation 139,659 108,133 Loss on equity investments 5,529 14,832 Change in excess tax benefits from share-based compensation (3,510) (40,182) Deferred income taxes 69,868 14,314 Other non-cash charges -- 613 Changes in operating assets and liabilities: Accounts receivable, net (28,682) (50,211) Prepaid expenses and other assets (8,487) (539) Accounts payable (2,422) 19,770 Accrued compensation 16,079 1,761 Income tax payable 44,517 49,554 Other accrued liabilities 28,566 (4,062) Deferred revenue 163,326 76,994 ------------- ------------- Net cash provided by operating activities 796,097 875,179 Cash flows from investing activities: Purchases of property and equipment, net (153,101) (164,604) Purchases of available-for-sale investments (1,461,532) (474,007) Proceeds from sales of available-for-sale investments 285,379 130,237 Proceeds from maturities of available-for-sale investments 398,435 369,114 Changes in restricted cash (11,276) (8,094) Purchases of minority equity investments, net (6,205) (2,458) ------------- ------------- Net cash used in investing activities (948,300) (149,812) Cash flows from financing activities: Proceeds from issuance of common stock 164,207 119,450 Purchases and retirement of common stock (453,888) (604,700) Net proceeds from customer financing arrangements 19,613 22,963 Redemption of convertible debt -- (288) Change in excess tax benefit from employee stock option plans 3,510 40,182 Proceeds from noncontrolling interest 4,400 -- ------------- ------------- Net cash used in financing activities (262,158) (422,393) ------------- ------------- Net (decrease) increase in cash and cash equivalents (414,361) 302,974 Cash and cash equivalents at beginning of period 2,019,084 1,716,110 ------------- ------------- Cash and cash equivalents at end of period $ 1,604,723 $ 2,019,084 ============= ============= Supplemental disclosure of cash flow information Cash paid for interest $ 5,417 $ 5,224 Cash paid for taxes $ 139,969 $ 147,999 Supplemental disclosure of non-cash investing and financing activities: Common stock issued in connection with conversion of the Senior Notes $ -- $ 399,208 Juniper Networks, Inc. Cash, Cash Equivalents, Trading, and Available-For-Sale Investments (in thousands) (unaudited) December 31, December 31, 2009 2008 -------------- -------------- Cash and cash equivalents $ 1,604,723 $ 2,019,084 Short-term investments 570,522 172,896 Long-term investments 483,505 101,415 -------------- -------------- Total $ 2,658,750 $ 2,293,395 ============== ==============
Contact Information: Investor Relations: Kathleen Bela Juniper Networks, Inc. (408) 936-7804 kbela@juniper.net Media Relations: Melanie Branon Juniper Networks, Inc. (408) 936-2632 mbranon@juniper.net